Misselling insurance is wrong; there is no debate on that. Lower commissions for agents could mean lower premiums and, in turn, more policies sold. That is a fair assumption too. But the debate over the Insurance Regulatory and Development Authority of India's (IRDAI) new consultation paper titled "Recalibrating Economics of Insurance Distribution," is not as black and white. There is a lot of nuance to factor into any assessment of a consultation paper that saw insurance stocks shunned by the Street.
PB Fintech, the poster boy of tech-led insurance distribution and an investor darling, saw its stock lose 32% on Day One. On NDTV Profit, we took a balanced view: the voices of companies that say the proposals in the consultation paper are harsher than expected were weighed against voices speaking for consumers who have been victims of missold policies. There is no doubt that a system which gives the insurance agent the bulk of his or her commission in the first year encourages poor practices. But there is also a case to be made for stable policymaking. For any new entrepreneur, an uncertain policy landscape, where an entire business model can be decimated by one consultation paper, is a nightmare. We will have to wait and see if the final policy on insurance agent commissions is as strict as proposed, or watered down. Meanwhile, policy buyers beware: the odds are not stacked in your favour.
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Perhaps seeing the bigger picture is the need of the hour, both for insurance reform and the listing of the National Stock Exchange (NSE). I was witness to history this week, watching NSE's market debut on the Bombay Stock Exchange (BSE). It is a seminal moment for an exchange that waited ten years, shrugged off the ignominy of the co-location scam, and finally hit the bourses. There has been chatter of a muted debut, with an opening price of Rs 1,800, a meagre listing gain by all standards. Many have also compared it to the pre-listing highs of Rs 2,230.
While all this analysis is par for the course, the fact remains that NSE's listing offers retail investors access to a pure-play capital markets bet for their portfolios. With a market capitalisation of over Rs 4.5 lakh crore, NSE is already a large-cap stock. Analysts warn that while this may be a fine addition to the family silver, it will also move at the pace of one.
Investors may not get much comfort even at a slow pace. The rough ride for Indian equities continues, with no relief in sight. US bond yields, both the 30-year and the 10-year, hit multi-decade highs this week. Crude has stayed above $100 a barrel, with no real breakthrough visible on the US-Iran war. The headlines and photo ops from the UN General Assembly session in New York were eye-catching, but it would be fair to say there was no substantial outcome, unless you count the effort to now rebrand artificial intelligence as "superintelligence."
Was banning certain media outlets from the White House press pool itself a mark of "superintelligence"? That is a question that is being asked more loudly after networks muted their broadcast of Trump's own speech in protest, switching off television mics in solidarity. Even the President's own network, Trump TV, could not fill the gap. At a time when the role and relevance of the media is being constantly questioned, this was a reminder of why the fourth estate matters. Another reminder came from India's own newspapers, with two in-depth investigative stories driving the discourse across national and business media.
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