8 Life Insurers Breach IRDAI Expense Caps in FY25, Raising Cost Concerns

• Only 17 out of 25 Indian life insurers complied with IRDAI's revised expense regulations in FY25, indicating significant cost pressures in the sector.
• Eight life insurers breached the allowable expense limits across participating, non-participating, and linked products, raising regulatory concerns about cost efficiency.
• The IRDAI (Expenses of Management, including Commission, of Insurers) Regulations, 2024, mandate limits on management expenses based on product type and duration.
• The life insurance industry reported gross expenses of management totaling Rs 1.38 lakh crore in FY25, representing 15.60% of the total gross premium.
• Despite new flexible frameworks, many insurers struggle to control costs, particularly those with high commissions and front-loaded acquisition expenses, amidst aggressive distribution expansion.

Why It Matters: Most life insurers struggle with IRDAI expense norms, highlighting persistent cost management challenges.