Insurance costs under lens: RBI flags high-cost distribution driving premium growth, warns of medium-term pressure

The Reserve Bank of India’s Financial Stability Report highlights emerging structural pressures in the insurance sector, noting that premium growth is increasingly driven by high-cost distribution strategies rather than operating efficiency. While the sector remains stable in the near term, elevated expenses could weaken profitability and necessitate a shift towards cost rationalization and technology-enabled distribution for long-term resilience.