Jobs in line as IRDAI commission caps force insurance brokers to rethink models
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…
Mumbai: Insurance regulators have proposed reforms that could lower selling costs, prompting brokers to reconsider their business models. Quickinsure, a Pune-based firm, has announced over 100 job cuts, including discontinuation of its field relationship management model. The Insurance Regulatory and Development Authority of India (IRDAI) is considering commission caps, which could lead brokers to reduce reliance on salaried employees and adopt variable-cost models.
Experts predict the reforms could significantly reduce upfront remuneration, especially in health and motor insurance. If implemented, brokers may face the loss of up to 100,000 jobs across the industry. Lower commissions could make it challenging for brokers to maintain large field-sales teams, as salaries are fixed costs irrespective of individual employee performance.
The reforms could also impact banks and NBFCs, reducing their insurance-related income from products with high commissions. Smaller brokers who rely on cold calling may need to adapt their business models, collaborate with other distributors, or exit the market if the lower commission structure becomes unsustainable.
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