29 non-life insurance companies have paid Rs. 7,000 crore as commissions to their intermediaries like agents, brokers and banks, shows the latest data from the General Insurance Council’s yearbook 2016-17.
These general insurers had disbursed commissions of Rs. 5,996 crore in FY 2015-16 indicating a 14% growth in commission payouts.
Of the Rs. 7,000 crore, individual agents have received Rs. 3,700 crore from non-life insurance sales, shows the data. Currently, 6.64 lakh individual agents distribute general insurance policies. A rough calculation shows that the average commission payout to each agent is Rs. 557 a year.
Similarly, corporate agents like banks and brokers received gross commissions of Rs. 804 crore and Rs. 1,960 crore respectively last fiscal.
Industry experts believe that the commission payouts in non-life insurance segment will increase further in the coming years due to increasing new business premium, introductions of new products and expansion of distribution channels.
In fact, the gross commission has increased by 200% in the last nine years, the council data highlighted. The total gross commission paid to insurance intermediaries increased from Rs. 2,299 crore in FY 2007-08 to Rs. 6,882 crore in FY 2016-17.
Non-life insurance companies have kept their momentum going by recording 32% growth in premium collection in FY 2016-17. According to a recent Moody’s report, the general insurance industry is likely to maintain its double digit growth over the next 3-4 years, aided by a higher economic expansion and increased household spending.