Regulator Plans Major Steps To Make Insurance More Affordable

India’s insurance regulator is working on a set of changes that could help bring down insurance costs and make policies easier for consumers to compare and buy, according to a recent report by the Financial Express. The Insurance Regulatory and Development Authority of India (Irdai) is expected to roll out several measures over the coming months, with a focus on cost efficiency, transparency, and wider insurance access.

For years, affordability has been one of the industry’s persistent challenges. Even where awareness has improved, many households still see insurance, particularly health and comprehensive life cover, as something to postpone rather than prioritise. Regulators increasingly appear to recognise that expanding coverage will require tackling structural cost issues, not just pushing new products.

Focus On Lowering Distribution Costs

Distribution expenses sit at the centre of this discussion. Insurance in India still depends heavily on agents, brokers, and bank partnerships to reach customers. That network has helped expand coverage geographically, but it also adds layers of cost, much of it tied to commissions and servicing expenses.

The regulator is understood to be looking at whether commission structures can evolve so that they reward ongoing policy servicing and customer retention rather than concentrating payouts heavily at the initial sale stage. The thinking is fairly straightforward: if servicing and persistency carry more weight, insurers may be able to contain acquisition costs over time.

Industry insiders have long argued that this could also improve customer outcomes. When incentives align with long-term relationships instead of quick closures, conversations around policy suitability tend to become more meaningful. That shift, if it happens, may do as much for trust as it does for pricing.

Digital Marketplace And Structural Reforms

Parallel to this, work continues on Bima Sugam, a proposed digital marketplace meant to let customers compare insurance policies in one place. The platform is expected to bring pricing, features, and service indicators onto a single interface, making comparisons less opaque. Current indications suggest a commercial rollout could happen around May 2026.

If executed well, such a platform could subtly change buying behaviour, especially among younger policyholders already comfortable comparing financial products online. Standardised products are likely to appear first, mainly to make comparisons simpler before more customised offerings are introduced.

Behind the scenes, the regulator is also looking at operational efficiencies. There is also some quiet work happening around data-sharing within the industry. The idea is to allow insurers, with customer consent, to access more reliable information so risk assessment improves, fraud checks become easier, and claims don’t drag on unnecessarily. These changes may not grab attention immediately, but they often end up shaping costs more than big-ticket reforms.

At the same time, regulators are also working on changes to accounting norms and capital rules for insurers. These may sound technical, but they’re meant to keep companies financially strong and, over time, could influence how policies are priced.

None of this is likely to change the market overnight. But the effort seems aimed at cutting avoidable costs, making products easier to understand, and gradually improving how the industry operates. Whether premiums actually fall will depend on how these plans play out, though the push to widen access is clearly there.