Life insurance sector’s individual NBP to grow at ₹1.8 lakh crore in FY26: ICRA

Rating agency ICRA has estimated individual new business premium (NBP) for the life insurance sector to grow at around ₹1.8 lakh crore in FY2026 and ₹2.0 lakh crore for FY2027, from ₹1.66 lakh crore in FY2025. Further, it expects GST exemption on individual life insurance policies, which enhances customer affordability, to boost individual NBP growth in the medium term.

However, in the short term, the agency noted that the value of new business (VNB) margins may face pressure due to the loss of input tax credit, following the GST exemption.

ICRA expects the share of individual NBP of private insure₹to rise to around 65% by FY2027, up from 63% in FY2025. On the other hand, Group NBP, which saw modest growth of around 1% each in FY2024 and FY2025 due to LIC's subdued performance, expanded by 10.3% in the seven months of FY2026.

Consequently, the overall NBP (Individual + Group) is expected to rise to ₹4.3 lakh crore and ₹4.7 lakh crore in FY2026 and FY2027, respectively, from ₹4 lakh crore in FY2025.

In the light of anticipated strong growth and a continued rise in sum assured, solvency is projected to moderate, while continuing to exceed the regulatory minimum of 1.5 times.

It also noted that the solvency position of private insure₹remained strong at 2.1 times as of March 2025, supported by equity infusions and the issuance of subordinated debt during FY2025.