Page 2 - Insurance

RBI flags high-cost distribution pressures in insurance sector growth model

The Reserve Bank has flagged structural pressures in the insurance sector, saying premium growth is being increasingly driven by high-cost distribution-led strategies of insurance companies rather than operating efficiency. While posing no near-term systemic risks, the surface-level stability masks emerging structural pressures that could weigh on medium-term sustainability and coverage expansion, RBI said in its latest financial stability report. "A primary pressure is the persistence of a high expense structure, particularly the acquisition costs. Premium growth has been increasingly driven by high-cost distribution-led strategies rather than operating efficiency," the report said. It further said that while in the life insurance sector, frontloaded acquisition costs limited the extent to which scale efficiencies are passed on to policyholders. Furthermore, expected benefits from digitisation remain unrealised. "From a financial stability perspective, continuously elevated expen

Rupee swings push NRIs to rupee-linked term insurance: Experts explain

'Currency swings are reshaping protection choices,' as experts say NRIs increasingly prefer rupee-linked term plans for India-based liabilities

High distribution costs limit insurance coverage, says RBI in FSR report

RBI's Financial Stability Report said high distribution-led costs are embedded in pricing, hurting affordability and penetration, while insurers' conservative investing may weaken product appeal

Misselling in insurance sector a significant concern: Irdai annual report

Irdai has flagged mis-selling as a major concern in India's insurance sector, asking insurers to conduct root-cause analysis, even as penetration remained unchanged at 3.7% in FY25

Reforms, robust demand may drive insurance growth back to double digits

After a muted FY26 so far, India's insurance industry is expected to return to double-digit growth in FY27, aided by regulatory changes, GST rationalisation and improving demand across segments

Irdai imposes ₹1 cr penalty on Reliance General Insurance for norm breaches

Regulator said the insurer made payouts to entities and an individual agent in violation of norms, and asked it to place the order before its board and submit an action report

Policy changes create room for foreign insurers to explore: Sompo MD

India's non-life insurance sector is set for faster growth as the Insurance Amendment Bill allows 100% FDI, boosts investor confidence and strengthens regulation, says Mathur, Universal Sompo CEO

Insurance intermediaries with high commissions may see payouts drop

Currently, 50 per cent of life insurance investment is allocated to government securities and the balance 50 per cent to other alternative investments

Insurance amendment Bill strengthens Irdai: LIC chief R Doraiswamy

For LIC, the proposed legislative changes will help the company in strengthening its reach, leveraging technology at scale, and for universal insurance coverage

Insurance Amendment Bill: High-commission intermediaries may see payout cut

The Insurance Amendment Bill empowers IRDAI to limit high commissions, reclaim unlawful gains, and strengthen oversight of intermediaries while opening new investment avenues for insurers

Insurance reforms pave way for 100% foreign ownership in pension firms

The measure is an "enabler" that will help draw interest from global investors in the pension fund sector over time

FDI cap hike to 100% in insurance to boost coverage, jobs: Experts

Increasing the foreign direct investment limit to 100 per cent in the insurance sector will help expand coverage, create jobs and make life cover policies more affordable and accessible, said experts. They were commenting on the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025, which was passed by the Parliament on Wednesday. The bill seeks to raise FDI (foreign direct investment) limit in the insurance sector from 74 per cent to 100 per cent. Terming the legislation as a landmark reform, Bajaj General Insurance MD and CEO Tapan Singhel said it reflects a government that has listened carefully to citizens and industry stakeholders and responded with a long-term vision. By strengthening policyholder protection, improving transparency, and empowering the regulator, the Bill builds trust at the core of the insurance system, Singhel, who is also the chairman of the General Insurance Council, said. "This will help expand insurance coverage, create jobs across the value .

Insurance industry flags concerns over proposed Insurance Amendment Bill

Under the proposed Bill, the revised definition of insurance business seeks to allow insurers to enter into non-insurance contracts as well

Insurance Amendment Bill to ensure accessibility, affordability for all: FM

Nirmala Sitharaman further noted that India needs further capital infusion into the insurance sector

Govt holds road shows to sell 10% stake in General Insurance Corp

India plans to sell a total of 10 per cent stake in the insurer in tranches to meet the market regulator's minimum public shareholding norm, Reuters reported last year

100% FDI in Insurance: Legacy distribution remains hurdle for foreign firms

The FDI limit in the insurance sector was raised from 49 per cent to 74 per cent in 2021

Maritime call for Atmanirbharta: Why India needs a local P&I Club

A P&I Club is a mutual insurance association that protects shipowners, operators from third-party liabilities - covering risks such as oil spills, cargo damage, pollution, collisions, and crew injury

RBI urges cost cuts; PFC–Sidbi scrap bond issues; insurance premiums surge in November & more

RBI Governor Sanjay Malhotra has urged bank CEOs to reduce intermediation costs and improve operational efficiency, citing the 125-bps rate cuts since February.

Sahaj Insurance gets Irdai licence, targets 100 mn rural policies in 1st yr

Sahaj Insurance Services Pvt Ltd, which recently received a corporate agency licence from IRDAI, aims to sell about 10 crore insurance policies designed to suit the rural population. Sahaj Insurance Services Pvt Ltd, a subsidiary of Sahaj Retail Ltd, operates a network of about 4.5 lakh digitally enabled rural centres serving over 70 crore people. In a statement, the Kanoria Foundation company said the new vertical is designed to make insurance, long characterised by low awareness and limited access in rural regions, simple, affordable and accessible at the last mile. Sahaj Centres will offer a full suite of insurance products, with trained Sahaj Mitrs facilitating customer onboarding, support and claims assistance, it said. "Customers will be able to access assisted digital enrolment, paperless processes, multi-lingual support and help with filing claims. These features are essential for first-time insurance adopters in rural markets. The services will also integrate ...

New insurance ombudsman reforms set to speed up claims, believe experts

Stronger penalties, wider access and a digital system promise clearer, faster grievance resolution for policyholders