Quick Summary
The withdrawal of ITC following the GST rationalisation on individual life and health insurance from 18% to nil is expected to weigh on the profitability of life insurers in the third quarter of FY26 (October-December), analysts said. However, strong investment income is likely to provide a cushion for general insurers during the period. While the GST exemption has triggered healthy premium growth across life and health insurance segments, it has also removed ITC benefits, putting pressure on m
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FAQ :
The withdrawal of Input Tax Credit (ITC) following the GST rationalisation on individual life and health insurance is expected to weigh on the profitability of life insurers in Q3FY26.
The GST exemption has triggered healthy premium growth across life and health insurance segments, despite the removal of ITC benefits.
Value of new business (VNB) margin is a key profitability indicator for life insurers. It is expected to remain under strain in Q3FY26 due to ITC losses, but this impact may be partially offset by other factors.
Axis Max Life is likely to be the fastest-growing private insurer, followed by SBI Life, HDFC Life, and ICICI Prudential Life. LIC is also expected to report robust growth.
General insurers are likely to see stable growth, with multi-line insurers benefiting from steady growth in motor insurance. Profitability for general insurers is expected to be supported by strong investment income.
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