PB Fintech Sheds Over ₹34K Cr In M-Cap In 3 Sessions, Turtlemint Loses ₹1,549 Cr

Insurtech firms Turtlemint and PB Fintech have experienced significant declines in market capitalization over the past three trading sessions, experiencing a combined loss of over ₹35,705 crore. Turtlemint's shares fell to a new intraday low of ₹81.45, while PB Fintech's declined to ₹1,151.90. The bearish trend is attributed to the IRDAI's consultation paper, which proposes to reintroduce product-level commission caps following their removal and the shift to an expense of management framework.

This move aims to curb mis-selling and reduce distribution costs for customers, but could have a significant impact on the business models of insurance distributors like Turtlemint and PB Fintech, as commissions play a crucial role in their revenue and customer acquisition strategies. The proposed regulation would set different caps based on the insurance product, distribution channel, and effort involved in selling and servicing a policy, potentially leading to a 10-12% decline in earnings for these companies if new-business commission rates are reduced by 10%.