Brokerages have highlighted mixed trends in the life insurance sector for August 2025, with individual annualised premium equivalent (APE) growth showing weakness as investors deferred purchases in anticipation of the GST rate cut. While most expect near-term softness to persist, a recovery is projected once the new tax rates take effect from September 22, 2025.
HSBC noted that individual APE for the sector declined 10 percent month-on-month in August, largely on account of deferred sales ahead of GST changes. It expects September to remain weak as well, but sees growth improving from the third quarter of FY26 onwards. The brokerage also flagged that insurers’ margins could come under pressure after the GST rate cuts, as passing on the impact of input tax credit adjustments will take some time.
CLSA described August as a slow month for the industry. Axis Max Life reported healthy growth in total APE, while HDFC Life and SBI Life were up just 1–3 percent. ICICI Prudential, however, posted a 9 percent year-on-year decline in APE. CLSA expects demand to recover once the new GST rates are implemented later this month.
Jefferies observed that retail APE for life insurers fell 1 percent year-on-year in August, compared with a 10 percent rise in July. The decline was led by weaker ULIP sales and postponement of purchases in anticipation of the GST cut. Axis Max Life led growth with a 16 percent increase, partly due to a monthly product launch, while HDFC Life managed only 1 percent growth. SBI Life reported a 4 percent decline and ICICI Prudential saw a 13 percent drop.
Morgan Stanley took a more positive view, noting that individual sum assured (SA) growth was stronger than APE across most private insurers. SBI Life posted a robust 73 percent growth, supported by strong traction in new retail protection products launched at the end of Q2FY25. HDFC Life recorded 13 percent growth in individual SA, while ICICI Prudential posted a 5 percent decline.
Overall, brokerages said that while August data reflects near-term weakness, sector fundamentals remain intact. A demand rebound is expected once the new GST rates take effect, with insurers likely to face short-term margin pressure as they adjust to the new tax regime.
Disclaimer: The views and investment recommendations expressed above are those of HSBC, CLSA, Jefferies and Morgan Stanley. They do not represent the views of this publication. This article is for informational purposes only and is not investment advice.
