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IRDAI Rules Shift Power to Insurers, Hit Brokers: Motilal Oswal Expert
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CNBC TV18•25-09-2026, 10:44
IRDAI Rules Shift Power to Insurers, Hit Brokers: Motilal Oswal Expert
- •New IRDAI rules on commissions and expenses will shift bargaining power from brokers to insurers, according to Motilal Oswal's Nitin Aggarwal.
- •Aggarwal predicts PB Fintech's FY28 revenue could drop by 30% and earnings by 40-50% if the proposed regulations are implemented.
- •The consultation paper led to a sharp decline in insurance and distribution stocks, with PB Fintech shares falling 35% in one session.
- •Insurers like ICICI Lombard, less exposed to the new rules, performed better, while distribution-heavy platforms like PB Fintech faced significant selloffs.
- •Banks with bancassurance income are expected to face a smaller impact compared to pure insurance distributors.
Key Questions Answered
Motilal Oswal's Nitin Aggarwal expects PB Fintech's revenue to drop by roughly 30% in fiscal 2027-28 if the IRDAI's proposed rules take effect, with earnings projected to fall by 40% to 50% due to fixed costs that cannot be quickly reduced.
Private sector lenders such as Bandhan Bank, Axis Bank, IDFC First Bank, and IndusInd Bank are identified as the most exposed to the new rules, with analysts estimating a single-digit percentage decline in their return on assets (ROA).
The consultation paper caused a sharp market reaction on Wednesday, September 23, with distribution-heavy platforms like PB Fintech dropping 35% in a single session, while insurers seen as less exposed, such as ICICI Lombard, held up better and closed higher.
