Irdai's distribution reforms may constrain smaller insurers: Acko CEO

ACKO CEO Animesh Das said uniform EoM limits across companies could restrict growth opportunities for smaller and newer insurers

The insurance regulator’s proposed distribution reforms, which seek to lower limits on expense of management (EoM) and caps on product- and channel-specific commission, are positive for consumers and will move the industry in the right direction, according to Animesh Das, managing director and chief executive officer, ACKO General Insurance.

 

However, uniform EoM limits across companies could restrict growth for smaller and newer insurers in the short term and affect the distribution models of certain companies operating in a certain way, he said.

 

“They (the regulator) will have to revisit it or fix it. From then, it (the industry) should grow because something that does good to the consumer benefits the stakeholder,” Das added.

 

Growth in insurance has remained largely stagnant for nearly a decade, he said.

 

“The ecosystem was not making sense but now it can. So, there will be a correction on the wrong practices,” he added.

 

The Insurance Regulatory and Development Authority of India (Irdai) has proposed lowering EoM limits for life and general insurers. For general insurers, it has recommended shifting the basis of calculation from gross written premium (GWP) to domestic gross direct premium income (GDPI) and reducing the limit from 30 per cent to 20 per cent over five years.

 

ACKO General Insurance’s EoM stood at 38.69 per cent as of March 31, 2026, down from 47.71 per cent a year earlier, but still above Irdai’s 30 per cent limit.

 

In August, Irdai debarred ACKO from opening places of business for six months for allegedly breaching the EoM limit in FY25. According to the regulator, the insurer’s allowable EoM for FY25 was ₹650.37 crore against expenses of ₹985.15 crore, an excess of ₹334.78 crore.

 

“If the EoMs are the same for all the companies, there is little scope for smaller or the newer company to grow. There is likely to be representation from smaller companies about it because it is going to impact them,” Das said.

 

He also said in a direct-to-customer (D2C) model such as ACKO’s, the initial customer acquisition cost was high, but renewals were nearly free.

 

The acquisition cost, when spread across the renewal cycle, is lower than the commissions paid in the market.

 

“It gets optimised for us. We invest our savings in customer experience,” he said.

 

According to ACKO, more than 60 per cent of its motor insurance revenue comes from renewals.

 

ACKO recently launched three offers — DriveCam, ACKO Clinic and AirPass — aimed at providing protection beyond conventional insurance claims. DriveCam, bundled with select car-insurance policies, records road incidents, with footage stored on the customer’s device and phone.

 

ACKO Clinic, opening soon in Bengaluru, will offer members year-round health care, including consultations with doctors, diagnostics and preventive health checks.

 

AirPass, an annual subscription for domestic flyers, provides a ₹1,500 payout for eligible flight delays exceeding 90 minutes and up to ₹3,000 in rebooking discounts for cancelled or missed flights.