Deepak Sood, Member (non-life), IRDAI
The country’s insurance sector needs to focus immediately on bringing down the high cost of customer acquisition and expenses of management (EoM) to achieve more profitability and provide insurance products to customers at more affordable prices, according to Deepak Sood, Member (non-life), IRDAI.
‘missing middle’
Speaking at InsureInd, organised by CII in Kolkata on Wednesday, Sood emphasised that the sector needs to come up with solutions to make health insurance more affordable to the “missing middle”, the customer segment, who are finding it “extremely difficult” to have sufficient health insurance cover as they are not affluent and do not come under government schemes such as Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana (PMJAY).
“…the high cost of acquisition and the high expenses of management, I think, that is something that needs immediate focus from all players in the industry, in order to be able to produce more profitability, in order to be able to get more affordability for customers, in order to be able to deliver more value for customers. Each product, each channel, each line of business needs to evaluate what is the value that we are delivering to customers. That is an area that needs addressing,” said Sood.
He pointed out that insurance regulator IRDAI has already brought in a lot of regulatory changes in terms of ease of doing business for industry players, bringing in more product innovations and extending the scope of the ‘use and file’ procedure, under which companies can launch products that suit customers’ needs.
Notably, the Economic Survey for FY26, tabled in Parliament in January, pointed out that escalating customer acquisition and administrative costs for insurance companies have led to an increase in operational cost dynamics. As a result, the sector has remained constrained by a “low-penetration, high-cost” equilibrium, driven by a high-cost distribution model.
Sood emphasised that the industry needs to ensure everyone has sufficient and meaningful cover for life, health and property insurance at an “extremely affordable price”.
“Because, ultimately, the premium that you pay, the affordability that you have, will decide the premium as a percentage of GDP. The aim is to ensure everyone by 2047, and that is a true measure of penetration. That is where we need to come in, and we need to provide, we need to reach out,” he said, adding insurance companies need to build on three platforms — affordability, accessibility and awareness.
According to him, issues such as miss-selling have damaged the trust in the industry, besides hurting customers and insurance companies. “That needs to be addressed, because everybody has to be cautious. Selling correct is an imperative that every salesperson, every insurance company, every distributor must pursue,” Sood added.
Significantly, Finance Minister Nirmala Sitharaman recently asked commercial banks to focus on their core business of lending and deposit mobilisation and stop mis-selling of insurance products which has reached alarming proportions.
Published on February 25, 2026
