INSURANCE
Insurance industry needs to control customer acquisition costs to improve profitability: IRDAI member
Feb-26-2026

Insurance Regulatory and Development Authority of India (IRDAI) member (Non-Life) Deepak Sood has said that insurance industry needs to control customer acquisition costs and overall management expenses to improve profitability and make products more affordable. He urged insurers to evaluate the value delivered across products, channels and business lines. His comments assume significance as the Economic Survey for FY'26 flagged rising acquisition and administrative expenses as a structural constraint for the sector, noting that a high-cost distribution model has kept insurance penetration low despite steady premium growth.

He said the industry must prioritise solutions to make health insurance affordable for the ‘missing middle’ households that are neither affluent nor covered under government-backed schemes such as Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana. He noted that many in this segment struggle to secure adequate health cover. He further said the regulator has introduced multiple reforms to ease compliance and promote product innovation, including expanding the scope of the ‘Use and File’ procedure that allows insurers to launch customer-centric products without prior approval but subject to regulatory norms. 

He underscored that achieving universal and meaningful coverage in life, health and property insurance by 2047 would be the true measure of penetration. He said affordability, accessibility and awareness must form the three pillars of growth, and added that the premium-to-GDP ratio would improve only if products are priced within reach of ordinary households.

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