IRDAI’s draft commission caps put PB Fintech’s insurance-broker model in focus
Proposed limits on commissions and expenses from FY28 could pressure insurance distributors, with PB Fintech seen as most exposed. Insurers such as LIC and SBI Life may be relatively insulated, while banks could see lower bancassurance fee income. Draft norms are open for feedback for a month.
What happened
IRDAI’s proposed commission and expense caps could pressure PB Fintech’s insurance-broker economics most sharply. LIC and SBI Life appear relatively insulated,
Key facts
- Pure-term life first-year commissions capped at 25-30%
- EOM limit of 12.5% for life insurance over five years
- EOM limit of 20% for general insurance over five years
- 10% cut in new-business commission rates could reduce broker earnings by 10-12%
- Commission caps proposed from FY28
- Bajaj Finance leverage: 4.9x
- Bajaj Finance ROE: 21%
- Bajaj Finance loan-growth CAGR: 23%
- Bajaj Finance BHFL stake: 87%
- Potential capital raise: about ₹150 billion
Why this matters
Use the consultation period to model partnership, acquisition, and vertical-integration opportunities as tighter distributor economics could reshape valuations across digital brokers and bancassurance assets.