Dynamic pricing's unacceptable in insurance, big payouts erode value: IRDAI chief Ajay Seth

What happened: IRDAI chairman Ajay Seth said dynamic pricing is unacceptable in insurance and that big payouts erode value, speaking at a financial industry summit. The regulator is weighing proposals to cut commissions and cap them. Key numbers: Health insurance commissions could fall from an industry average of about 24% to 15-20%. Why it matters: Seth said commissions appear to drive policyholder switching between insurers, and he flagged concern that lower commissions could disincentivise renewal and portability. IRDAI will decide after stakeholder engagement, aiming for consensus.

IRDAI chairman Ajay Seth said dynamic pricing is unacceptable in insurance and that big payouts erode value, speaking at a financial industry summit. The regulator is weighing proposals to cut commissions and cap them.

Seth said commissions appear to drive policyholder switching between insurers, and he flagged concern that lower commissions could disincentivise renewal and portability. IRDAI will decide after stakeholder engagement, aiming for consensus.