Will IRDAI’s Broker Commission Crackdown Make Insurance Cheaper For Consumers?

Will IRDAI’s move to curb insurance commissions actually make policies cheaper for consumers? Deepak Yohannan, Insurance Expert, explains why lower commissions may not automatically translate into substantially lower premiums. According to him, insurers could use part of the savings to improve customer service, claims management and distribution, while some benefits may reflect in their profitability. He also points to the experience following GST changes, where the reduction did not necessarily translate into equivalent premium cuts for consumers. While some insurers could pass on a portion of the benefit, policyholders should not assume that commission changes will directly lead to significantly lower premiums.