India’s insurance sector is anticipated to show a satisfactory operating performance in the third quarter of the financial year 2026, as per a report by Emkay Global Financial Services. The sector is likely to benefit from favorable GST-related tailwinds across life, general, and health insurance segments. Despite an expected strengthening in premium growth momentum, profitability metrics may face pressure due to GST input tax credit losses, high commission payouts, and regulatory adjustments.
Life insurance companies are forecasted to witness healthy growth in Annualised Premium Equivalent (APE) during the quarter. This growth is expected to be supported by increased affordability post GST changes and normalization of base effects after revised surrender regulations implementation. Protection products, especially term insurance, are projected to be the primary beneficiaries of the GST tailwind, driven by rising customer preference.
The report highlights that Life Insurance Corporation of India (LIC) is expected to achieve strong APE growth, backed by a favorable base in the retail segment and significant traction in group business. On the other hand, general insurance companies are poised to report robust growth in Gross Written Premium (GWP), primarily fueled by strong performance in the Motor and Health insurance segments. The reduction in GST rates is likely to boost growth in the Motor Own Damage segment by supporting new vehicle sales.
Moreover, the retail health insurance segment is anticipated to witness substantial growth due to improved affordability following GST rate exemptions. However, the group health segment might experience moderate growth due to increased competitive pressures. General insurers are expected to maintain elevated combined ratios in the quarter, mainly driven by higher commission payouts. Nonetheless, certain players may observe slight improvements in claims ratios.
Looking forward, Emkay Global Financial Services predicts that life insurers will sustain healthy APE growth momentum, supported by GST tailwinds and the normalization of base effects.
