Recent data from the Insurance Regulatory and Development Authority of India (IRDAI) reveals that life insurance companies paid an average commission of 4.03% to distributors for Unit-Linked Insurance Plans (ULIPs) in 2024, up from 3.13% in 2023. The total commission paid for ULIPs in 2024 was Rs. 4,900 crore, while the total ULIP premiums collected were Rs. 1.21 lakh crore.
Tata AIA Life topped the list of insurers, paying 11.22% in commissions to distributors, followed by Aviva Life at 8.32%, and Shriram Life at 6.65%. Other insurers, such as Axis Max Life, HDFC Life, and PNB MetLife India, also paid significant commissions, ranging from 4.92% to 4.67%.
In absolute terms, SBI Life paid the highest commission on ULIPs, amounting to Rs. 1,371 crore in 2024, followed by Tata AIA Life at Rs. 818 crore, and HDFC Life at Rs. 701 crore. ICICI Prudential Life and Axis Max Life also paid substantial commissions, with Rs. 548 crore and Rs. 354 crore, respectively.
The data highlights the significant role that commissions play in the sale of ULIPs in India. ULIP commissions accounted for 9.5% of the total commission payout in FY 2024. The high commissions paid by some insurers suggest that they are relying heavily on distributors to sell their ULIP products.
The top 10 life insurers in terms of ULIP commission payouts were SBI Life, Tata AIA Life, HDFC Life, ICICI Prudential Life, Axis Max Life, Bajaj Allianz Life, LIC, Kotak Mahindra Life, Aditya Birla Sunlife, and PNB MetLife India. These insurers paid a total of Rs. 3,831 crore in ULIP commissions in 2024, accounting for approximately 78% of the total ULIP commission payout.
The data also shows that some insurers, such as Bandhan Life and Future Generali India Life, paid very low commissions, with 0.01% and 1%, respectively. This suggests that these insurers may be relying more on other distribution channels, such as online sales or direct marketing, to sell their ULIP products.
Overall, the data provides insights into the commission structures of life insurers in India and highlights the importance of distributors in the sale of ULIPs. It also suggests that some insurers are relying heavily on commissions to drive sales, which could have implications for policyholders and the overall insurance industry.