India's insurance reform overhaul slashes distributor commissions to 3%
· Business · Reuters, Economic Times
India's insurance sector overhaul, effective April 2024, has reduced brokerage commissions to 3% across private and state-owned insurers, down from previous rates of up to 25% for traditional plans and 15% for unit-linked policies. The Insurance Regulatory and Development Authority of India (IRDAI) notified the change in its latest master circular, affecting both new business and renewal commissions. Analysts warn the move could shrink distributor earnings by 70% or more, prompting concerns about agent attrition in a market where private insurers rely heavily on third-party networks. The reform aims to improve consumer transparency and align with global best practices, but has already triggered protests from industry bodies representing over 200,000 insurance agents nationwide.
Why it matters
Over 200,000 insurance distributors face earnings cuts of up to 70%, threatening livelihoods in a sector that employs millions of part-time and full-time agents across urban and rural India.
Read the original report — Reuters
Join us on Telegram
Breaking news the moment it lands. At 10,000 members we ship the Android app.