PB Fintech, the parent company of insurtech platform Policybazaar, said the proposed commission caps by the Insurance Regulatory and Development Authority of India (IRDAI) could reduce its revenue by 30%, primarily impacting its general insurance business. The company shared these details during an analyst call on September 24, highlighting the significant financial impact of the regulatory changes.
During the call, PB Fintech co-founder and Group CEO Yashish Dahiya explained that the company’s revenue is split evenly between life and non-life insurance. He noted that while life insurance revenue is expected to remain stable, general insurance revenue could decline by 33-40%. Dahiya illustrated the impact by saying that if general insurance commissions are compressed by 60%, the overall revenue would shrink by about 30%.
The commission caps come as part of IRDAI’s efforts to regulate insurance commissions, which could reshape the insurtech market. PB Fintech operates on a combined operating ratio model with most general insurance partners, meaning that reductions in claims ratios or commissions could allow insurers to lower prices. The company anticipates a 15-20% volume growth in general insurance to partially offset the revenue decline, reflecting expected customer response to lower premiums.
PB Fintech’s management emphasized that the life insurance segment should not face major revenue impacts. The company’s next earnings report, scheduled for the upcoming quarter, will provide clearer insights into how the commission caps affect its financial performance and volume growth in general insurance.