Taming Costs: A New Era for Insurance Profitability

The insurance sector is urged to lower acquisition and management costs to boost profitability and make offerings affordable. Highlighting the need for health insurance solutions for the 'missing middle,' IRDAI member Deepak Sood emphasized compliance reforms, customer-centric products, and improved accessibility to enhance sector penetration by 2047.

The insurance industry is under pressure to reduce customer acquisition and management costs, aiming for greater profitability and affordability, according to Deepak Sood, an IRDAI member, speaking at the 'InsureInd' event hosted by CII.

Sood highlighted the essential need to address high management expenses, a barrier to affordability and value for customers, as outlined in the Economic Survey for FY'26. The survey noted rising expenses as a structural issue that impedes insurance penetration.

The focus, according to Sood, should be on making health insurance accessible to the 'missing middle' households. He emphasized compliance relief and innovative product design as part of IRDAI's reforms, aiming for universal insurance coverage by 2047.

(With inputs from agencies.)