Cut costs to make health covers affordable, Irdai tells insurers

Kolkata: Irdai (Insurance Regulatory and Development Authority of India) has urged the insurance sector to focus on bringing down the high cost of customer acquisition and EoM (expenses of management) in order to achieve more profitability and provide insurance products to customers at more affordable prices.While speaking at "InsureInd", organised by CII in Kolkata on Wednesday, Deepak Sood, member (non-life), Irdai, said that the sector needed to come up with solutions to make health insurance more affordable to the "missing middle", the customer segment that found it extremely difficult to get sufficient health insurance cover as they were not affluent and did not come under govt schemes like Ayushman Bharat or PMJAY (Pradhan Mantri Jan Arogya Yojana).
He said Irdai had already brought in many regulatory changes in terms of ease of doing business for industry players, like bringing in more product innovations and extending the scope of the "use and file" procedure, under which companies can launch products that suit customers' needs immediately.Incidentally, the Economic Survey for FY26, tabled in Parliament in Jan, pointed out that escalating customer acquisition and administrative costs for insurance companies led to an increase in operational cost dynamics. As a result, the sector remained constrained by a "low-penetration, high-cost" equilibrium driven by a high-cost distribution model.