GST Exemption Boosts Life Insurance Sales 21%, But ITC Loss Hits Margins

• Individual life and health insurance premiums became GST exempt from September 22, 2025, boosting demand.
• India's private life insurers saw a 21% year-on-year growth in sales volumes during Oct-Nov 2025.
• However, the non-availability of Input Tax Credit (ITC) is projected to reduce FY26E VNB Margins by 200-300 basis points.
• Companies like HDFC Life, Max Financial Services, SBI Life, and IPRU Life show varied growth, with HDFC Life facing a significant ITC impact.
• Insurers may mitigate margin pressure through commission cuts, strong retail protection volume, and improved ULIP margins.

Why It Matters: GST exemption fueled life insurance sales, but ITC loss threatens profitability for insurers.