Anand said the draft consultation paper could reduce PB Fintech’s take rate — the share of premiums it earns as revenue — from around 18% to approximately 11%.
The impact could push the insurance distributor into losses in FY28 and FY29, Anand said.
The proposed changes could also put pressure on the broader insurance distribution industry, with smaller distributors potentially finding it difficult to remain viable at lower commission rates.
Distributors face bigger impact
Anand said the key issue for the sector was not necessarily the proposed regulation itself but the uncertainty around its final form and implementation.
“It’s not a regulatory overhang, it’s regulatory uncertainty,” Anand said.
The proposed commission changes could have a relatively smaller impact on insurance companies because lower distribution costs could benefit their margins. However, Anand said the benefits for insurers would have to be weighed against the potential impact on distribution networks and the pace of insurance penetration.
His overall assessment was negative to neutral for insurers but significantly more adverse for insurance distributors.Smaller players could exit
If the proposed rules are implemented strictly, some smaller distributors could find their existing business models unviable. That could reduce competition and allow larger players that remain in the market to gain market share.
Anand said such consolidation could eventually help surviving companies offset some of the initial revenue pressure.
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However, the final impact remains difficult to assess because the consultation process is still under way. Industry participants are expected to submit their responses in October, while there is no fixed timeline yet for the final regulations.
Until IRDAI publishes the final framework, uncertainty around commission rates is likely to remain high, making it difficult for investors to assess the long-term earnings impact on insurance distributors.
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