In the January–March quarter of FY26 (Q4 FY26), insurance companies are anticipated to face profitability challenges primarily due to the loss of input tax credit (ITC) linked to the Goods and Services Tax (GST) rationalization on retail life and health insurance policies. Analysts suggest that general insurers may experience less impact, buoyed by positive demand in health and motor insurance segments. However, volatility in equity markets is expected to adversely affect insurers' investment income. A report from Emkay indicates that a 14% correction in the Nifty50 index during Q4, along with a 10% decline in the second half of FY26, could lead to a 4-5% negative economic variance for private life insurers and nearly 10% for the Life Insurance Corporation of India (LIC). Life insurers are likely to counteract the ITC loss by shifting focus towards non-linked products, with rising demand for term plans. The report estimates that while SBI Life Insurance may see a marginal 1% increase in Value of New Business (VNB), HDFC Life is projected to decline by 6%. In contrast, LIC is expected to report a 25% increase in VNB for Q4 FY26, compared to a decline in the previous year. General insurers are likely to maintain a stable combined ratio despite some ITC loss impact, but subdued equity markets may limit capital gains and profitability. Looking ahead, uncertainties in the economic and geopolitical landscape could challenge general insurers, particularly with pricing pressures and regulatory developments.