Insurance PSU general insurers paid higher commission than private non-life insurers

PSU general insurers paid higher commission than private non-life insurers

The general insurance industry has paid gross commission of Rs.10,030 crore against the total premium collection of 1.53 lakh crore last fiscal.

Nishant Patnaik Mar 22, 2019

The general insurance industry has witnessed a massive growth of 52% in its commission payout last fiscal.

IRDAI’s annual report shows that the commission expense ratio of non-life industry i.e. commission paid with respect to the premium received of the life insurance industry has increased from Rs.6602 crore in FY 2016-17 to Rs.10030 crore in FY 2017-18.

Further, the data shows that the general insurance industry has received the total premium of 1.53 lakh crore last fiscal. This indicates agents have received 7% of the total premium they have collected as commission.

While PSU general insurers have disbursed gross commission of Rs.5083 crore against the total premium of Rs.68,000 crore with commission expense ratio of 7.50%, their private counterparts have paid gross commission of Rs.3946 crore against the premium collection on 65500 crore indicating commission expense ratio of 6%. This clearly shows that PSU general insurers pay commission to their agents at a better rate compared to the private general insurers.

IRDAI said, “The gross commission expenses of public insurers, private general insurers, standalone health insurers and specialized insurers stood at Rs.5083 crore, Rs.3946 crore, Rs.988 crore and Rs.14 crore respectively for 2017-18, cumulatively amounting to a total gross commission expense of Rs.10030 crore for the general insurance industry.”

The gross commission payout were highest in motor insurance last fiscal. IRDAI data shows that the non-life insurance industry has paid gross commission of Rs.4300 last fiscal against the total premium of Rs.59250 crore indicating that the agents have received 7% commission from motor insurance policies.

Health insurance segment followed motor insurance with gross commission payout of Rs. 3500 crore. The health insurance industry collected new business premium of Rs.41,980 crore in FY 2017-18.

Commission expense ratio of non-life industry in FY 2017-18 (Figures in Rs.crore)

Segment	PSU	Private including standalone health insurers	Total
Motor	2200	2070	4270
Health	1516	1918	3435
Fire	609	430	1040
Marine	147	143	290
Others	612	370	997
Total	5082	3946	10030

Source: IRDAI

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4 Comments

Sanjay Jotwani · 5 years ago `

Kindly give details of remuneration of non life staff

Mohan Jangid · 5 years ago `

We have seen two articles related to commission earned by agents in life insurance and non life insurance business. These articles are found media also. What is discussion of such publishing of articles regarding the commission earned by agents in both insurance category. Why IRDA has allowed such publication and whether it is compliance to publish. If such is than we people should ask various authorities to publish income earned by various categories of employees in an organisation like bank, insurance companies, governing bodies including. The IRDA and SEBI both working toward much needed transparency but should do with true spirit.

Vijay · 5 years ago `

Pvt Insurance Co may be paying less commission compared to that of psu insurance co. But considering the incentives like foreign trips and like othet benifits which are being paid to pvt insurance co., total expenses may be higher thsn psu

Platty · 5 years ago `

It is very unfortunate that the free Lancers like insurance agents and mutual fund advisor income has to be disclosed in the media whose sole dependence is on this income. Taxes like tds and gst is deducted from commission. Nobody pays us any travel allowance etc to bring in the business which takes lot effort and pain. In the end net commission is peanuts. As rightly said by Mr. Jangid all employees of SEBI, KRDA, AMC, insurance companies, banks, and even our politicians and bureaucrats salaries and perks should be disclosed in the public. TDS & GST should be charged to politicians who have free telephone, travel, food etc.

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