Irdai Urges Insurers to Diversify Beyond Parent Banks

Irdai is encouraging insurers to diversify distribution channels and reduce dependence on parent banks for policy sales. The reliance on bancassurance models could lead to complacency. Digital growth and regulatory alignment with broader policy priorities are deemed necessary for the insurance sector.

The Insurance Regulatory and Development Authority of India (Irdai) has called on insurers to expand their distribution channels beyond heavily relying on their parent banks. Currently, some insurers depend on their parent banks for more than three-fourths of policy sales, an anonymous official revealed on Thursday.

Addressing the issue, the regulator highlighted that an abrupt reduction in reliance on the bancassurance model could destabilize operations, but emphasized the necessity for a gradual transition towards digital and other diversified channels.

The topic of policy mis-selling was also raised, with officials underscoring the importance of adhering to communicated concerns, including those from top government figures, to ensure ethical practices in the industry.

(With inputs from agencies.)