High costs and commissions make insurance less affordable, says RBI
The Reserve Bank of India's latest report points out that high distribution costs and rising commissions are making insurance expensive for everyone.
Even though total premiums shot up from ₹8.3 lakh crore in 2020-21 to ₹11.9 lakh crore in 2024-25, the overall growth in both life and non-life insurance has slowed down.
Why does this matter?
While the industry's assets have reached a massive ₹74.4 lakh crore (mostly from life insurers), insurance penetration as a percentage of GDP has fallen, indicating that GDP is growing faster than premiums.
Private insurers are paying out higher commissions, which eats into profits and keeps prices high for customers.
The RBI suggests using tech-driven models and smarter incentives to help more people get covered, aiming for IRDAI's objective of "Insurance for All" by 2047.
If you've ever wondered why insurance feels pricey or complicated, this is a big part of the answer.