Insurtechs, the online apps and websites that sell insurance, are pushing back on new IRDAI reforms. According to reporting by Inc42, they say the changes could cut their revenue by about 70%.
For you, nothing changes today. Your policy stays valid and your claims work as before. But how you buy insurance, and what you pay, could change over time.
Key takeaways
- Insurtechs oppose the IRDAI reforms and say revenue could fall by about 70%.
- That 70% is the companies' own projection, as reported by Inc42.
- Your existing policy and claims are not affected right now.
- Fewer online sellers could mean less choice and fewer comparisons.
- Compare quotes before you buy, and read the policy wording.
How insurtechs make money, in simple terms
IRDAI is the Insurance Regulatory and Development Authority of India. It's the regulator that sets the rules for insurers and for the people who sell insurance.
Most insurtechs don't build insurance products themselves. They sell plans made by insurance companies. In return, they usually earn a fee from the insurer when you buy. That fee is often called a commission.
So any rule that touches how sellers are paid, or how they sell, can hit their income quickly. That's why the sector is speaking up.
What this could mean for your premiums
The reporting we have doesn't spell out every detail of the reforms. So nobody can say yet how prices will move. Here's a simple, made-up example to show the idea.
Say you buy a term plan with a yearly premium of ₹12,000. If an app's costs go up and it passes a small part on to you, your bill could rise. If the app leaves the market, you'd just buy from another seller.
| Scenario (example only) | Yearly premium | Change |
|---|---|---|
| Today | ₹12,000 | None |
| Seller passes on 3% | ₹12,360 | +₹360 |
| Seller passes on 5% | ₹12,600 | +₹600 |
| Seller stops selling | Buy elsewhere | Fewer options |
These numbers are only an illustration. Real changes depend on the final rules and on how each company reacts.
Who is affected
First-time buyers feel it most. Many young people buy term, health and motor cover through apps because it's quick and easy.
People who already hold a policy are mostly safe. Your cover is a contract with the insurer, not with the app. If the app closes, your policy continues.
Agents and small advisers could also feel the effect. Rules about selling and pay often apply across the whole industry. Insurers may also adjust how they work with online partners.
What to do now
You don't need to rush or panic. A few calm steps will keep you well protected.
- Keep a copy of your policy papers and your insurer's customer care number.
- Don't cancel a good policy because of this news.
- If you plan to buy soon, get two or three quotes first.
- Check the insurer, not just the app, before you pay.
- Watch the news hub for updates once the final rules are clear.
Insurance premiums also compete with your other monthly bills. The EMI calculator shows how much room you have each month. Check it before you take on a new payment.
Frequently asked questions
Will my existing insurance policy stop working?
No. Your policy is a contract with the insurance company. It stays valid even if the app that sold it changes its business.
Will insurance get more expensive because of this?
It's too early to say. The 70% figure is the insurtechs' own estimate. The final rules and company choices will decide what happens to prices.
Should I wait before buying a policy?
Not if you need cover now. Waiting leaves you unprotected. Compare quotes, pick a plan that fits your needs, and buy from a trusted insurer.
BankCreds analysis
This story is less urgent for you than the headline suggests. A 70% revenue loss is the companies' own projection. It isn't a cost to you, and it may never happen.
Think of a family buying a ₹1 crore term plan at ₹12,000 a year. If an app's income fell, it could raise fees or stop selling some plans. Even a 5% rise would add only ₹600 a year. That's real money, but it's not a shock.
What this does not mean
It does not mean insurtechs will shut down. It does not put your existing policy at risk. Your cover depends on the insurer, not the app that sold it.
The bigger point is choice. Fewer sellers can mean less comparison. So compare at least two or three quotes before you buy, wherever you buy.
This section is BankCreds' own assessment of what the development means for Indian borrowers and savers. It is independent commentary, not part of the source reporting above.
Sources & references
- Inc42 — originating report https://inc42.com/buzz/insurance-brokers-oppose-irdai-reforms-project-70-revenue-loss/
- IRDAI — IRDAI is the regulator that sets rules for insurers and the people who sell insurance https://irdai.gov.in/
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Editorial note & disclaimer
How this was reported. The development above is attributed to the source or sources listed. BankCreds does not independently verify a third party's reporting; where a figure or a regulatory position is stated as fact, it is either attributed or drawn from the regulator's own published material. Everything under "BankCreds analysis" is our own assessment.
Rates and figures. Interest rates, per-gram values and premium bands quoted here are indicative, move daily, and differ by borrower profile, city and lender policy. Confirm the final number with the institution before you act on it — the sanction letter or policy schedule governs, not a news report.
Not financial advice. This article is general information for an Indian audience. It is not investment, tax, credit or insurance advice, takes no account of your circumstances, and BankCreds is not a lender, broker, distributor or advisor. Consider speaking to a SEBI-registered investment adviser or a qualified professional before acting.
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