Life insurance stocks saw sharp declines as of 1:22 PM on November 28 following an exclusive report by CNBC-TV18 regarding new regulatory measures. The Insurance Regulatory and Development Authority of India (IRDAI) is reportedly concerned about the over-dependence of insurers on bancassurance and is likely to ask insurers to cap the share of business generated through banks at 50%.
- SBI Life Insurance fell 3.46%, trading at ₹1,453.25.
- HDFC Life Insurance dropped 3.73%, trading at ₹655.15.
- Max Financial Services (MFSL) witnessed the sharpest decline, down 4.72%, trading at ₹1,131.95.
According to the CNBC-TV18 report, IRDAI is expected to monitor the share of banks, particularly parent banks, in an insurer’s overall bancassurance business. A glide path may also be considered to reduce these dependencies over time.
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Currently, the bancassurance business for some of the largest insurers is highly concentrated:
- SBI Life: Nearly 95% of its business comes from SBI.
- HDFC Life: Around 80-85% of its business is generated via HDFC Bank.
- Max Life: Roughly 90% of its bancassurance business stems from Axis Bank.
The potential regulatory changes could reshape how life insurers generate business and diversify their distribution models.
Disclaimer: This report is based on market updates and does not constitute investment advice. Please consult your financial advisor before making any investment decisions.
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