The value of new business (VNB) margins may come under pressure in the short term due to the loss of tax credit, due to the GST exemption, before improving in the medium term.
The NBP is expected to grow from ₹1.66 trillion in FY25 to ₹1.8 lakh crore in FY26 and ₹2.0 lakh crore in FY27.
The value of new business (VNB) margins may come under pressure in the short term due to the loss of tax credit, due to the GST exemption, before improving in the medium term. In light of the expected strong growth and a continued increase in the insured amount, solvency is expected to moderate, but continue to exceed the legal minimum of 1.5x.
“The GST exemption on individual life insurance policies, which improves affordability for customers, is expected to boost individual NBP growth over the medium term. After a subdued first half, this NBP growth is expected to recover in the second half of FY2026, with an expected overall increase of around 9 percent for FY2026,” Neha Parikh, Vice President and Sector Head, Financial Sector Ratings, ICRA, said in a press release.
Private insurers are expected to expand their share of individual NBPs to around 65 percent in FY27 from 63 percent in FY25. Individual NBP growth in the first half of FY26 was subdued at 3.1 percent year-on-year (yoy), compared to 11.2 percent yoy in FY25, reflecting a high base for the first half of FY25.
On the other hand, the NBP group, which saw modest growth of around 1 percent each in FY24 and FY25 due to LIC’s lackluster performance, grew 10.3 percent in Q7 FY26, while LIC recorded strong growth. Growth was further supported by group life insurance products and group term products from private insurers.
The momentum is expected to continue, with the group’s overall NBP expansion projected at around 9 percent in FY26, ICRA said.
More like this
Published on November 27, 2025
#Individual #NBP #life #insurance #grow #FY26 #ICRA