TL;DR: Life Insurance Commissions in India rose from 5.18% of total premium in 2021-22 to 6.86% in 2024-25, while total premium grew from ₹6.93 lakh crore to ₹8.86 lakh crore. Individual agents accounted for 49.4% of new-business premium in 2024-25, followed by bank-linked corporate agents at 32.6%. Together, they accounted for about 82%. Private insurers had 32.73 lakh individual agents in 2024-25, more than twice the 14.87 lakh with public-sector insurers, reversing the position seen in 2001-02.

Context

Buying an insurance policy involves more than the premium paid by the customer. Insurers also incur distribution and servicing costs, including payments to agents and other intermediaries.

This distribution system is now under review. On 23 September 2026, IRDAI released a consultation paper titled Recalibrating Economics of Insurance Distribution. The proposed reforms cover the structure of insurance distribution, expenses, commissions, transparency, market conduct and digital infrastructure.

IRDAI has also proposed changes to the Expense of Management framework. For life insurers, the EoM limit would be linked to Gross Direct Premium Income, with a proposed limit of 15% within two years and 12.5% within five years. Commission limits would also take into account factors such as the line of business, distribution channel, product complexity and selling effort.

The consultation paper also proposes greater transparency around commission structures and safeguards against compulsory bundling and mis-selling. It proposes that different forms of remuneration, including direct, indirect, monetary and non-monetary payments, be considered within the commission framework.

Who Compiles This Data?

The Insurance Regulatory and Development Authority of India (IRDAI) is India’s insurance regulator. The data used in this article comes from IRDAI’s Handbook on Indian Insurance Statistics.

Where can I download Clean & Structured Data on Insurance?

Clean, structured and ready-to-use datasets covering life insurance premiums, commissions, distribution channels and individual agents can be downloaded from Dataful.

Key Insights

Life Insurance Commission Has Increased Relative to Premiums in Recent Years

Commission accounted for 6.8% of total life insurance premium in 2009-10. This share generally declined over the following decade, reaching 5.2% in 2021-22. It then increased for three consecutive years, reaching 6.9% in 2024-25.

In absolute terms, total life insurance premium increased from ₹7.83 lakh crore in 2022-23 to ₹8.86 lakh crore in 2024-25, an increase of about 13.2%. Commission, however, increased from ₹42,322 crore to ₹60,800 crore over the same period, an increase of about 43.7%. The commission-to-premium ratio rose from 5.4% in 2022-23 to 6.9% in 2024-25, an increase of about 1.5 percentage points.

The long-term trend is also notable. The ratio was above 6% for most of the period from 2009-10 to 2013-14, fell below 6% from 2014-15 onwards and reached its lowest point in 2021-22. It then increased to more than 6% in 2023-24 and reached 6.9% in 2024-25.

Individual Agents and Banks Account for Most Life Insurance New Business

Individual agents were the largest distribution channel for life insurance new-business premium in each of the three years covered. Their share stood at 52.8% in 2022-23, declined to 50.8% in 2023-24 and fell further to 49.4% in 2024-25.

Corporate agents associated with banks were the second-largest channel. Their share increased slightly from 32.8% in 2022-23 to 33.1% in 2023-24 before easing to 32.6% in 2024-25.

Together, individual agents and bank-linked corporate agents accounted for around 85.5% of new-business premium in 2022-23. Their combined share fell to around 82.0% by 2024-25, although they still accounted for more than four-fifths of new-business premium.

Direct selling was the third-largest channel among those shown. Its share increased from 7.8% in 2022-23 to 10.7% in 2024-25. Brokers also increased their share from 3.1% to 3.7% during the same period.

Public vs Private: Individual Agents with Life Insurers

Private insurers had 68,444 individual agents in 2001-02. This increased to 32.73 lakh in 2024-25. Public-sector insurers, meanwhile, had 7.92 lakh individual agents in 2001-02. Their number increased to 14.87 lakh by 2024-25, although the growth was much more gradual than in the private sector.

The data also shows a major change in the relative size of the two networks. In 2001-02, public-sector insurers had more than 11 times as many individual agents as private-sector insurers. By 2006-07, private insurers had already surpassed public insurers in the number of individual agents.

Private-sector agent numbers reached 30.77 lakh in 2008-09 before declining over the following few years. They fell to 18.09 lakh in 2014-15 and then began increasing again, reaching 32.7 lakh in 2024-25.

Why Does It Matter? 

Insurance distribution is changing, and at the same time, IRDAI is proposing to recalibrate the economics of the sector. Commission grew by 43.7% between 2022-23 and 2024-25, more than three times the 13.2% growth in total premium over the same period, a gap that pushed the commission-to-premium ratio to 6.86%, its highest level in over a decade.

Individual agents and bank-linked corporate agents remain central to this system, together accounting for about 82% of new-business premium in 2024-25, even as the agent network itself has shifted dramatically: private insurers now have more than twice as many individual agents as public-sector insurers, a reversal of the position two decades ago.

These trends give the consultation paper its context. IRDAI’s proposed reforms, covering Expense of Management (EoM) limits, commission structures tied to selling effort and product complexity, and greater transparency around remuneration, are arriving at a moment when commission costs are rising faster than the premiums customers pay, and when the agents carrying that commission are increasingly concentrated in the private sector.

Key Numbers

• Commission-to-Premium Ratio:
  2021-22: 5.2% → 2024-25: 6.9%

• Total Life Insurance Premium:
  2022-23: ₹7.83 lakh crore → 2024-25: ₹8.86 lakh crore

• Total Commission:
  2022-23: ₹42,322 crore → 2024-25: ₹60,800 crore

• New-Business Premium Share by Channel (2024-25):
  Individual Agents: 49.4%, Bank-linked Corporate Agents: 32.6%, Direct Selling: 10.7%, and Brokers: 3.7%

• Individual Agents (Private vs Public Sector):
  2001-02: 0.68 lakh (Private) vs 7.92 lakh (Public)
  2024-25: 32.73 lakh (Private) vs 14.87 lakh (Public)