Shares of PB Fintech plunged nearly 36 per cent to Rs 1,207.20, their biggest single-day fall, following Irdai’s consultation paper proposing sharp changes to insurance distribution commissions and rationalisation of expense of management (EoM) limits.
According to analysts who posted excerpts of the call on X, PB Fintech described the proposals as “quite extreme” and said they could have a significant impact on its general insurance business, while the impact on its life insurance business would be more limited.
The company said its life and non-life businesses contribute roughly equally to its overall business. If general insurance commissions decline by 60 per cent, the company could compensate through higher volumes, although the impact on net present value would be lower, it said.
PB Fintech also raised concerns about the proposed commission levels, saying larger agents may find it less attractive to sell insurance at the recommended rates. The company expects hiring to slow as a result, while its plans for international expansion remain unchanged. It will also rework its point-of-sale person (POSP) business, it said.
The company said it took 15 years to turn profitable and expects FY28 to be volatile as the new framework takes effect. However, it aims to get back on track by FY29 and does not expect any impact on its business in the current financial year.
The comments came a day after Irdai proposed a new framework for insurance distribution under which commissions would be calibrated based on the segment, line of business, distribution channel, product complexity and the effort involved in selling and servicing a product.
