Key facts
- Acko CEO Varun Dua believes proposed insurance distributor commission caps could lead to industry consolidation.
- Dua stated that lower commissions might encourage distributors to seek customers in smaller towns and expand coverage.
- PB Fintech chairman Yashish Dahiya previously warned that commission caps pose an existential threat to distributors.
- Acko reported a 35% increase in operating revenue to Rs 2,837 crore in FY25.
- Dua suggested differentiating commission caps by product, with motor insurance attracting the lowest.
Varun Dua, the founder and chief executive of Acko, has suggested that proposed changes to insurance distributor commission norms could lead to significant consolidation within the industry. Speaking to ET, Dua indicated that intermediaries with less scale or a short-term focus are likely to be phased out, fostering a more professional and consolidated distribution ecosystem.
These remarks follow reports that the Insurance Regulatory and Development Authority of India (IRDAI) is considering capping commissions paid to distributors, a move that gained traction after the government amended the Insurance Act in January 2026, empowering the regulator to set limits.
While Yashish Dahiya, group chairman of PB Fintech, which operates Policybazaar, has expressed concerns that commission caps pose an existential threat to distributors, Dua views the potential changes more broadly. He believes they could push players to explore new markets and expand insurance coverage to a larger customer base, making products more affordable, particularly in smaller towns.
Acko, which operates directly with consumers, reported a 35% increase in operating revenue to Rs 2,837 crore in FY25, with its net loss narrowing to Rs 424 crore. The company processed Rs 286 crore in insurance premiums in April 2026.
Dua also advocated for differentiating commission structures based on product type, suggesting motor insurance should have the lowest commissions, while health and life insurance could offer higher payouts. He drew parallels with the mutual fund industry, which experienced disruption from commission changes but ultimately adapted and continued to grow.