GST cut lifts health insurance premiums to record in FY26

India’s non-life insurers have reported their highest-ever health insurance premium collections in the current fiscal, as a sharp cut in the Goods and Services Tax (GST) has boosted demand for retail health insurance across the industry.

The general insurance industry has collected ₹1.24 lakh crore in health insurance premiums in the first eleven months of the current fiscal, already surpassing the ₹1.18 lakh crore recorded in the entire FY25.

Health insurance premiums grew 15.32% year-on-year during April 2025–February 2026, according to provisional data from the General Insurance Council. The industry had reported ₹1.08 lakh crore in the same period last year. The non-life segment includes public and private general insurers, standalone health insurers, and specialised public sector insurers.

Surge in collections

The surge in collections has also lifted the share of health insurance within the overall industry. Health now accounts for 41% of the ₹3.07 lakh crore non-life industry, up from 38.40% a year earlier. Premiums are expected to rise further in March, typically a strong month for insurers.

The industry growth was led by the retail health segment, where premiums rose 19% year-on-year to ₹48,952.01 crore as of February 2026. This was supported by the GST exemption on individual health policies—including family floaters and senior citizen plans—effective September 22, 2025.

These policies were earlier taxed at 18%. Group health insurance, the largest segment, grew 13% to ₹63,794.06 crore, while premiums from government health schemes rose 16% to ₹10,292.96 crore.

Among insurers, general insurers, including private and public sector insurers, reported a 14% increase in health premiums to ₹85,305.92 crore in the first eleven months of the fiscal, while standalone health insurers grew faster at 19.27% to ₹39,121 crore.

The standalone segment

The standalone segment includes Star Health, Niva Bupa, Aditya Birla Health, and Care Health, which have seen strong growth following the GST cut.

Meanwhile, the GST cut on various categories of automobiles also supported motor insurance demand, with premiums reaching ₹97,092.51 crore until February, nearing the ₹99,066 crore collected in the full FY25.

Source from: https://www.financialexpress.com/business/industry-gst-cut-lifts-health-insurance-premiums-to-record-in-fy26-4175737/