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Jobs in line as IRDAI commission caps force insurance brokers to rethink models

By Sohail Khan 30 September 2026, 1:58 am

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Business News›Markets›Stocks›News›Jobs in line as IRDAI commission caps force insurance brokers to rethink models

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Synopsis

Facing new commission regulations from the IRDAI, insurance brokers, including Quickinsure, are tweaking their business approaches. This pivot might cause a staggering loss of over 100,000 jobs as the industry reduces reliance on fixed sales teams. Brokers are expected to embrace more flexible cost structures and optimize sales output. Unfortunately, smaller brokers lack the established client base needed to weather these changes, risking their operational sustainability.

Insurance funds should go towards claims, not excessive acquisition costs: IRDAI chief — Facing new commission regulations from the IRDAI, insurance brokers, including Quickinsure, are tweaking their business approaches

Mumbai: The insurance regulator's proposed reforms to lower selling costs are prompting changes in brokers' business models-with Quickinsure announcing more than 100 job cuts and some brokers considering a shift to variable-cost models.

Pune-based Quickinsure has decided to discontinue its field relationship management model, a move that will reduce staff strength by more than 100. The company said the decision followed an assessment of its operating models in light of the distribution reforms suggested by the Insurance Regulatory and Development Authority of India (Irdai).

ET Bureau

In the balance

According to Shrikhande, if that does not happen, the industry could see more than 100,000 job cuts across brokers, an increase from just 100 with Quickinsure.

Industry executives said lower commissions would make it difficult for brokers to sustain large field-sales teams because salaries remain a fixed cost irrespective of the business generated by individual employees.

"The immediate casualty is that I will have to cut down on my fixed cost, high-cost fixed employee model," said another broker.

Also Read: Insurance mis-selling is arising because upfront commissions are too high: IRDAI chairman Ajay Seth

Irdai has proposed capping individual health first-time commissions at 15% for distribution entities, compared with an industry average of 24%, while new motor own-damage, personal accident and legal liability commissions would be capped at 5%, compared with the current average of 26%.

For retail liability and other miscellaneous products, the proposed cap is 15%, with lower limits for corporate and group businesses. The life insurance framework would also move away from high upfront payouts towards remuneration linked more closely to policy persistency.

Brokers could increasingly rely on POSPs and other variable-cost distribution channels, where remuneration is linked more directly to business generated. This could result in a leaner workforce and greater focus on sales productivity.

Industry participants said the impact is likely to be more pronounced for smaller brokers who depend on cold calling and do not have a large existing customer base. Such brokers could change their business models, tie up with other distributors, or exit the market if the lower commission structure makes their operations unviable.

Banks and non-banking finance companies (NBFCs) could also see lower insurance-related income, particularly from products such as credit-linked insurance, where commissions are significantly higher. However, their existing customer relationships could provide some cushion compared with standalone brokers.

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