Kolkata, May 23, 2026 : India’s general insurance industry may be prioritising growth over customer ownership and underwriting discipline, with rising dependence on intermediaries putting long-term profitability under pressure, according to a report by consulting firm Praxis Global Alliance.
The report comes days after IRDAI Chairman Ajay Seth raised concerns around the sector’s high-cost structure and excessive dependence on intermediary-led distribution.
According to Praxis, nearly 80 percent of insurance business in India continues to be driven through intermediaries such as agents, brokers, bancassurance partnerships and OEM channels. This has intensified competition among insurers for distributor mindshare, leading to aggressive commission payouts and weakening direct customer relationships.
The report said insurers are increasingly competing for distributor access rather than building long-term customer ownership. As a result, customers often remain loyal to intermediaries instead of insurers, with agents and distributors controlling acquisition, renewals and engagement.
Praxis described this as “reacquisition-led growth”, where insurers repeatedly incur acquisition-like costs even during renewals.
The report further noted that underwriting profitability remains structurally weak across the sector, with combined ratios continuing to remain above 100 percent, indicating underwriting losses.
According to Praxis estimates, underwriting losses stand at nearly 13 percent of net written premium (NWP), while investment income contributes around 21 percent of NWP. This suggests insurers continue to rely heavily on treasury income and investment gains to sustain profitability.
Madhur Singhal, Managing Partner, Praxis Global Alliance, said, “Indian general insurance has achieved strong scale, but underwriting profitability still remains well below global benchmarks. The next phase of value creation will likely come from stronger underwriting discipline, customer ownership and retention-led growth.”
The report also suggested that stronger direct-to-consumer (D2C) models could help insurers improve margins, reduce commission dependence and strengthen customer retention over time.
Customer surveys cited in the report showed that consumers may be open to buying directly from insurers if companies offer transparent pricing, simpler products, faster claims settlement and stronger digital servicing.
Vishal Bhave, Practice Leader, Insurance, Praxis Global Alliance, said regulatory developments around commission transparency, Bima Sugam, Ind AS 117 and risk-based capital frameworks could gradually push the industry towards healthier customer economics and more sustainable profitability.
He added that insurers building stronger direct customer engagement could be better positioned for long-term value creation.
