Insurers Seek Gradual Commission Cuts Under Proposed IRDAI Reforms
Insurance companies have urged the Insurance Regulatory and Development Authority of India (IRDAI) to adopt a gradual approach to reducing commissions as the regulator considers changes to insurance distribution costs and expense-of-management (EoM) limits.
IRDAI Chairman Ajay Seth recently held an informal meeting in Mumbai with senior executives from selected life, general and health insurers to discuss the proposed reforms. The consultation paper proposes lower EoM limits and significant reductions in commissions across insurance products and distribution channels.
During the discussions, insurers called for a phased reduction, or glide path, to allow intermediaries and insurance companies sufficient time to adjust their business models. They also sought differentiated EoM limits based on insurers’ size and operating requirements, alongside relaxation of proposed norms for group credit life insurance policies.
Industry representatives welcomed the regulator’s objective of reforming distribution economics but emphasised that implementation should recognise actual distribution costs. A gradual transition, they argued, would help insurers maintain business continuity while adapting to the proposed framework.
ICICI Prudential Life Appoints Siddhartha Mishra as MD and CEO
ICICI Prudential Life Insurance has appointed Siddhartha Mishra as an Additional Director and Managing Director and Chief Executive Officer for a five-year term, subject to regulatory approval.
According to the insurer’s regulatory filing, the appointment will take effect from October 14, 2026, or the date of approval by the Insurance Regulatory and Development Authority of India (IRDAI), whichever is later.
Mishra currently leads digital channels and partnerships, voice channels, customer service, NRI and IFIG groups at ICICI Bank. Before formally assuming charge as MD and CEO, he will serve as the insurer’s Chief Operating Officer from October 6, 2026, following approval by the board.
The leadership change follows Anup Bagchi’s resignation as MD and CEO of ICICI Prudential Life Insurance, effective October 13, 2026. Bagchi is scheduled to take over as Chief of HDFC Bank on October 27, 2026. Mishra’s appointment marks a leadership transition at the life insurer as it continues to develop its distribution, digital and customer-service capabilities.
Life Insurance First-Year Premium Rises 20.6% to Rs. 2.46 Lakh Crore in H1
India’s life insurance industry recorded a 20.6% year-on-year increase in first-year premiums to Rs. 2.46 lakh crore during April–September, compared with Rs. 2.04 lakh crore in the corresponding period last year. Growth was supported by individual and group single-premium policies, according to data released by the Insurance Regulatory and Development Authority of India (IRDAI).
In September, insurers collected Rs. 48,781 crore in first-year premiums, up 21.3% from Rs. 40,207 crore a year earlier.
The Life Insurance Corporation of India (LIC) maintained its market leadership, with first-year premiums rising 19.3% to Rs. 1.44 lakh crore during the six-month period.
Among private insurers, SBI Life recorded premiums of Rs. 20,255 crore, while HDFC Life reported an 18.3% increase to Rs. 19,571 crore. ICICI Prudential Life grew 25% to Rs. 11,821 crore, and Bajaj Life registered 39.8% growth to Rs. 8,848 crore.
Group single premiums increased 24.3% to Rs. 1.45 lakh crore, while individual non-single premiums rose 12.7% to Rs. 57,942 crore. Individual single premiums grew 16.6% to Rs. 29,140 crore. However, group non-single premiums declined 49.6% to Rs. 905 crore, reflecting uneven performance across product categories.
Private Life Insurers’ Bond FRA Volumes Decline 16% in FY27
Participation by private life insurers in the Bond Forward Rate Agreement (Bond FRA) market has declined by around 16% in FY27, largely due to a changing product mix and a lower share of non-participating (non-par) savings products. The Life Insurance Corporation of India (LIC), which is expanding its non-par portfolio, has partly offset the decline.
Bond FRAs help insurers manage interest-rate risks arising from long-term guaranteed liabilities. Guaranteed savings products are particularly relevant because they commit insurers to specified benefits, whereas pure protection products generally involve less interest-rate risk and require less hedging.
Industry officials do not view the decline as a structural change in demand. They expect activity to recover if insurers increase their focus on guaranteed products. Government bond yields of around 7% or higher, with some exceeding 7.5%, continue to support the attractiveness of such products.
Company disclosures show differing product strategies. HDFC Life’s non-par savings share of individual annualised premium equivalent fell to 18% in FY26 from 32% in FY25. Bajaj Life’s share declined to 16% from 21%, while SBI Life remained at 33%.
UNDP and Generali Central Launch Challenge to Expand MSME Insurance Coverage
The United Nations Development Programme (UNDP) and Generali Central have launched an insurance innovation challenge to identify and scale solutions that improve insurance access and resilience among India’s micro, small and medium-sized enterprises (MSMEs).
India has more than 73 million MSMEs, contributing approximately 30% of GDP and 44% of exports while employing 60% of the workforce. However, these businesses remain vulnerable to climate-related disasters, supply-chain disruptions, workplace risks, asset losses and unexpected health-related events.
Insurance can help businesses absorb financial shocks, maintain operations and recover more quickly. Nevertheless, limited awareness, affordability concerns and products that do not adequately address business requirements continue to restrict coverage.
The challenge seeks proven insurance products and distribution models addressing risks such as business interruption, health emergencies and asset damage. Eligible participants include insurers, insurtech companies, technology service providers, social enterprises and insurance distribution businesses legally registered in India.
Priority will be given to solutions that use technology to improve affordability and accessibility, integrate insurance with financial services, develop innovative distribution channels and strengthen financial literacy among MSMEs.
ICICI Prudential Life Insurance Profit Rises 25% to Rs. 374 Crore in Q2
ICICI Prudential Life Insurance reported a 25% year-on-year increase in net profit to Rs. 374.22 crore for the second quarter of FY27, compared with Rs. 299.26 crore in the corresponding quarter last year. Net premium income increased 16.55% to Rs. 13,803.90 crore during the reported period.
First-year premiums rose 8.63% year-on-year to Rs. 2,145.70 crore, while renewal premiums increased 6.49% to Rs. 7,296.47 crore. Single premiums recorded stronger growth of 38.68%, reaching Rs. 4,812.42 crore.
For the first half of FY27, new business premiums grew 25% to Rs. 11,821 crore. Value of New Business (VNB) increased 22.3% to Rs. 1,283 crore, with a VNB margin of 26%.
The insurer attributed its performance to a diversified distribution network, customer-focused products, strong risk management and capital metrics. It also indicated that its proprietary partner-stack platform would support collaboration with distribution partners as insurance regulatory reforms evolve.
Chief Operating Officer Siddhartha Mishra reiterated the company’s focus on protection and annuity products, alongside sustainable new-business growth and prudent risk management.
Acko CEO Flags Challenges for Smaller Insurers Under Proposed IRDAI Reforms
Animesh Das, Managing Director and Chief Executive Officer of Acko General Insurance, has supported the Insurance Regulatory and Development Authority of India’s (IRDAI) proposed distribution reforms, while cautioning that uniform expense of management (EoM) limits could constrain smaller and newer insurers.
The proposed reforms seek to reduce distribution costs through tighter EoM limits and product- and channel-specific commission caps. According to Das, these measures could benefit policyholders and help correct practices that have affected the industry’s development.
However, he warned that applying identical EoM limits across insurers with different business models and operating structures could restrict growth in the short term. Certain companies may also need to reconsider their existing distribution strategies to adapt to the proposed framework.
Das noted that insurance growth had remained largely stagnant for nearly a decade, suggesting that the existing ecosystem required structural correction. He said regulatory adjustments might be necessary to address the challenges faced by smaller players, while maintaining the broader objective of improving consumer outcomes.
Indian Bank Plans Insurance and Mutual Fund Ventures Within Two Years
Indian Bank plans to enter the insurance and mutual fund businesses through partnerships within the next 18–24 months, Managing Director and Chief Executive Officer Binod Kumar said. The public sector lender intends to pursue joint ventures rather than establish wholly owned subsidiaries, although potential partners have not yet been shortlisted.
The bank will assess prospective partnerships based on valuations, due diligence and regulatory approvals. It also plans to introduce a dedicated wealth management vertical in the second half of FY27 and is recruiting specialists for the initiative.
Indian Bank has mobilised approximately $2.4–2.5 billion through Foreign Currency Non-Resident (Bank) deposits. The funds are being used to replace higher-cost borrowings, retire bulk deposits and support credit growth. Around $2.3 billion has already been deployed in overseas credit markets.
The lender expects credit growth of 14–15% and has identified opportunities in green finance, data centres and logistics, supported by a corporate loan pipeline of approximately Rs. 60,000 crore. It is targeting a current account and savings account deposit ratio of 39–40%.
GST Exemption Drives Demand for Higher Insurance Coverage
The removal of goods and services tax (GST) on individual health and life insurance policies from September 22 last year has supported new policy purchases and increased coverage levels, according to insurers and distributors. Although the initial surge has moderated, the industry continues to grow from a higher base.
Term insurance purchases on Policybazaar initially rose nearly 2.5 times, while health insurance demand increased 2.2 times following the announcement.
“The sharp growth seen immediately after the announcement has now tapered, but the industry is growing from a higher base. There has also been around 20-25 per cent growth above projections, largely across both life and health over the first seven to eight months. So the growth is broad-based — it is both value growth and volume growth, with more lives being covered as well as higher average coverage,” said Amit Chhabra, chief business officer, Policybazaar.
The average ticket size of life and health insurance policies has increased by 10-15 per cent. HDFC ERGO reported that its new health insurance business nearly doubled year-on-year during this period.
“The GST reduction had a significant positive impact on health insurance, particularly on retail health. At HDFC ERGO, our new health insurance business has almost doubled on a year-on-year basis during this period. We believe that not only are existing customers moving towards higher covers, but a new set of people are coming to buy health insurance policies, as the GST reduction has improved affordability,” said Parthanil Ghosh, MD & CEO, HDFC ERGO General Insurance.
GST Council Move Allows Businesses to Claim ITC on Employee Insurance
The GST Council has recommended allowing businesses to claim input tax credit (ITC) on health and life insurance purchased for employees, easing restrictions on blocked credits. The change aims to reduce the tax burden on employers and make employee insurance coverage more affordable.
Under the existing rules, businesses cannot claim credit for GST paid on insurance cover provided to employees. The proposed change will retain this restriction for individuals purchasing health or life insurance for themselves and their families.
Sajja Praveen Chowdary, Director and CEO – Policybazaar for Business, said the 18 per cent ITC could make group insurance more affordable for smaller businesses, allowing savings to support expansion or enhanced employee benefits.
“Over the medium to long term, wider insurance coverage among the MSME workforce can also reduce the dependence of lower-income households on government-funded healthcare and social security schemes.,” he said.
Banks May Revise Insurance Distribution Strategies Amid Proposed Commission Cuts
Banks, major distributors of insurance products, may reassess their insurance sales strategies following the Insurance Regulatory and Development Authority of India’s (IRDAI) proposal to reduce commissions. Lenders are likely to review their product mix and distribution channels to protect fee income while managing the costs of maintaining their networks.
Banks could prioritise long-term insurance products offering relatively better commission opportunities and seek to offset lower payouts in other categories through higher sales volumes. Lenders holding stakes in insurance companies may also have greater incentives to direct business towards their group insurers, where they could potentially manage distribution economics more effectively.
