Brokers are playing a bigger role in the distribution of non-life insurance in India, with their share of premiums doubling to over 35% from 17% over the last 10 years. Individual and corporate agents have seen their share of premiums shrink in the same period.
The biggest driver of this shift has been motor insurance. Over the years, most auto companies have floated their own insurance broking firms, which enables their dealers to sell insurance policies of multiple companies. Earlier, dealers had corporate agencies.
Online distributors like Policybazaar and Coverfox too have obtained insurance broking licences. With the 2020 amendment of insurance rules, foreign investors are allowed to hold 100% in insurance distribution, resulting in significant investment.
The increase in brokers’ share has implications for the non-life industry in light of the insurance regulator lifting the caps on commissions. Insurers also have lesser control over the distribution as brokers are not affiliated with any company unlike corporate agents. Insurers say that this is a sign of maturing of the industry and will lead to more awareness.
