Insurance sector on upswing; brokerages forecast 9-10% FY26 retail APE rise

Brokerages remain upbeat on India’s insurance sector after the industry delivered a strong November 2025 performance, with Retail APE rising 27 per cent. The growth, analysts said, was driven by GST exemption benefits, a favourable base due to the festive period in November 2024, and base normalisation after last year’s surrender regulation impact.

 

Motilal Oswal Financial Services (MOFSL) expects the momentum to continue, supported by sustained traction in traditional products, better affordability following GST relief, and deeper geographical penetration by private insurers. Emkay Global Financial Services, meanwhile, pegs retail APE growth at 9 to 10 per cent for FY26.

MOFSL sees sustained momentum in insurance

MOFSL has named Max Financial Services Ltd (MFSL), the parent of Max Life Insurance, as its preferred pick in the sector. 

 

The brokerage noted that the industry’s individual WRP growth in November was the strongest in nearly three years at around 27 per cent, with both private and public players reporting growth of over 20 per cent.

 

The life insurance industry logged a 27 per cent year-on-year rise in individual weighted received premium (WRP) in November 2025, extending the post-GST exemption uptrend after an 18.9 per cent increase in October. Private insurers recorded their fastest expansion since March 2023 with 28 per cent year-on-year growth, while LIC reported a 23 per cent rise, marking its second straight month of above 20 per cent growth.

 

“The faster pace of growth among private players led to sequential market share gains, with the segment rising to 75 per cent of individual WRP,” MOFSL said.

 

Among listed insurers, SBI Life and Bajaj Life were the fastest-growing, posting individual WRP growth of 33 per cent and 39 per cent year-on-year, respectively. Max Life, HDFC Life, ICICI Prudential Life and Canara HSBC Life reported year-on-year growth of 23 per cent, 20 per cent, 13 per cent and 26 per cent. Industry-wide new business premiums rose 23 per cent year-on-year in November, supported by 12.5 per cent growth among private insurers and 35 per cent among public-sector players. 

 

MOFSL said the strong momentum is likely to sustain, driven by traditional product demand, improved affordability following GST relief, and expanding distribution. 

Emkay expects retail APE to strengthen in FY26

Emkay Institutional Equities said the industry’s 27 per cent Retail APE growth in November was in line with expectations, aided by GST-related tailwinds, the low festive base of November 2024 and base normalisation after amendments to surrender regulations. Private insurers grew 28 per cent, while LIC reported 23 per cent growth. 

 

On a two-year CAGR basis, the industry expanded 16 per cent, led by 22 per cent growth in the private sector, while LIC grew 4 per cent. For YTDFY26, Retail APE rose 7 per cent, with private players growing 12 per cent and LIC declining 2 per cent.

 

Among listed private insurers, SBI Life remained the fastest-growing, reporting 33 per cent Retail APE growth, followed by Axis Max Life at 23 per cent. ICICI Prudential Life’s Retail APE increased 25 per cent, while RWRP rose 13 per cent, reflecting strong demand for monthly and quarterly premium products. HDFC Life and Canara HSBC Life posted 20 per cent and 26 per cent growth, respectively. Group APE for the industry fell 8 per cent, pulled down by a 48 per cent decline among private players, although LIC offset the fall with a 111 per cent rise.

 

Overall APE increased 16 per cent, with LIC reporting 49 per cent growth and private insurers registering 5 per cent. 

 

With growth expected to bounce back in H2FY26 (on GST tailwinds and normalisation of new surrender regulations base impact), Emkay expects the industry’s Retail APE to grow 9-10 per cent in FY26E. 

 

"Private insurers are expected to outpace the broader sector, at growth of 11–12 per cent, while LIC is expected to see a comparatively modest growth of 4–5 per cent," said Emkay in its report.    

(Disclaimer: The views and investment tips expressed by the brokerage in this article are their own and not those of the website or its management. Business Standard advises users to check with certified experts before taking any investment decisions.)