Shares of insurtech firms PB Fintech and Turtlemint have lost a combined ₹35,704.74 crore in market capitalization over the past three trading sessions, according to inc42.com. PB Fintech's stock declined by over ₹30 per share today, closing at ₹1,151.90, while Turtlemint's shares fell 4.07% to close at ₹83.75.
The sharp decline follows the Insurance Regulatory and Development Authority of India's (IRDAI) consultation paper titled 'Recalibrating Economics of Insurance Distribution,' which proposes reinstating product-level commission caps. This move comes about three years after IRDAI removed such caps and shifted to an expense of management framework. The regulator aims to curb mis-selling and make distribution costs more reasonable for customers.
The proposed commission caps could significantly impact insurance distributors like PB Fintech and Turtlemint, as commissions form a crucial part of their revenue and influence customer acquisition spending. PB Fintech alone has seen a market value erosion of ₹34,155.78 crore since Wednesday, while Turtlemint's market cap dropped by ₹1,548.96 crore. The regulatory changes have triggered bearish momentum in the stocks.
PB Fintech's shares ended 1.17% lower today, while Turtlemint's stock closed with a 4.07% decline. The consultation paper was released post-market hours on Wednesday, marking the start of investor reactions reflected in the market capitalization losses over the subsequent three trading sessions.