Business: The life insurance industry has recorded a decline in new business premium (NBP) in October 2025. This decline is mainly seen due to the recent GST exemption on life insurance premiums. According to a report by Systematics Research, new business premiums have declined by 15 percent on a monthly basis in October, while an increase of 12 percent has been recorded on a year-on-year basis.

The result of GST exemption was seen to be opposite.
For private sector companies too, new business premium declined by 15 percent on a monthly basis, but saw an increase of 11 percent on an annual basis. According to experts, this decline is being seen as the effect of the GST exemption policy of the Central Government implemented from 22 September 2025. GST on life insurance premium has been reduced from 18 percent to zero. With this relaxation, customers will no longer have to pay GST on their insurance premiums. Although the move is aimed at increasing the reach and affordability of insurance, data suggests that the pace of premium collection has been temporarily impacted in the month following the rule change.

Growth strong on annual basis despite monthly decline
However, despite the monthly decline, a positive growth of 8 percent has been recorded on an annual basis in the financial year 2025-26. These figures reflect long-term sustainable demand for the life insurance industry. According to the report, in terms of Annualized Premium Equivalent (APE), the total APE of the industry declined by 17 percent on a monthly basis in October, but increased by 21 percent on an annual basis.

Experts say the pace of new premiums slowed down in October due to temporary confusion among customers after the announcement of GST exemption. However, the strong annual and fiscal year-to-date growth rates indicate that the life insurance industry is on a path of steady and sustained expansion.