Shares of insurance companies experienced significant gains on Thursday, with HDFC Life leading the rally at over 5% to settle at ₹556.8 per share on the BSE. According to reports from Business Standard, the surge was driven by investor expectations of lower commission payments to insurance distributors. Max Financial Services rose 4.6% to ₹1,553.1, while ICICI Prudential Life Insurance gained 4.4% to ₹492.1. SBI Life Insurance rose 3.7% to ₹1,762.3, making it the third-biggest gainer on the benchmark BSE. The Insurance Regulatory and Development Authority of India (IRDAI) is expected to issue a consultation paper soon on insurance commissions and distribution, which is likely to provide direction on the issue.
As reported by Business Standard, the proposed consultation paper is unlikely to specify limits on commissions or expenses of management. According to the report, banks are likely to face a significant reduction in commissions, while individual agents may see the smallest reduction. Group life insurance products could face a larger cut, indicating differentiated impact across insurance product categories. The market is anticipating that new norms, if implemented, will lower the commissions paid by insurers to distributors. Canara HSBC Life Insurance gained 1% to ₹155.3, while Life Insurance Corporation of India (LIC) rose 0.9% to ₹398.6.
The latest global insurance market data reveals significant shifts in market share and growth patterns. According to Swiss Re's latest global insurance outlook, the EU's share of global insurance premiums fell from around 37% in 2010 to about 26% in 2020, while the US share rose from around 32% to approximately 45%. More recent data suggests this divergence has continued, with the EU accounting for only around 16.7% of global insurance premium against 14.7% for the Euro area in 2024. By contrast, the US and Canada together accounted for approximately 47% of global premiums. This shift reflects the stronger growth and scale of the North American insurance market, particularly in life, annuities and property & casualty lines, and the comparatively weaker expansion of European insurance markets.
According to Business Standard reports, New India Assurance rose 7.1% to ₹197.05, while ICICI Lombard General Insurance gained 2.6% to close at ₹1,482 on the BSE. The New India Assurance Company also rose 7%, reflecting broad-based optimism across the insurance sector. However, PB Fintech, which operates the insurance marketplace Policybazaar, traded nearly 3% lower amid concerns over the potential impact of changes in insurance commission and distribution rules. Analysts expect the changes, if implemented, to benefit life insurers by reducing their distribution costs and improving margins, with the impact potentially more significant for insurers with greater reliance on bancassurance.
