The Indian life insurance industry spent a substantial ₹55,150 crore on commission payouts in FY2025, highlighting the central role of insurance intermediaries such as agents, brokers, and bancassurance partners in policy distribution, as per the Cafemutual report. These commission payments are integral to rewarding and sustaining sales channels across the sector.
Life Insurance Corporation of India (LIC), the largest public sector insurer in the country, accounted for the biggest portion of the total commissions. It paid ₹25,309 crore, which represents approximately 46% of the total industry commission spend. LIC relies overwhelmingly on its individual agency channel, with 96% of business sourced through agents.
LIC's traditional agency model remains robust, showing the continued importance of conventional sales strategies in the Indian life insurance space, even as digitisation gains momentum.
Private sector life insurance companies paid ₹29,850 crore in commissions in FY2025, accounting for 54% of the industry total. This reflects growing private sector participation and intensified competition within the insurance market.
Among private players, HDFC Life emerged as the top contributor, disbursing ₹7,835 crore in commissions, or 14% of the industry total, followed by ICICI Prudential Life, which paid ₹4,860 crore, contributing 9% to the overall payout. Both insurers extensively utilise bancassurance partnerships to distribute their products.
Tata AIA Life paid ₹4,175 crore, while Axis Max Life disbursed ₹3,145 crore in FY2025. These figures further highlight the widening revenue network and increased marketing expenditure across private players.
The following insurers rounded off the top 10:
Together, these players form a significant portion of the private insurance market and contribute heavily to motivating their agency networks and bank tie-ups.
Many of the private insurers rely predominantly on bancassurance to distribute their products. For instance, HDFC Life and ICICI Prudential Life have extensive banking partnerships, which demand high commission structures. This method helps them tap into the established customer bases of banks, speeding up product penetration and customer outreach.
In comparison to LIC’s agency-driven model, bancassurance-led models provide scalability with relatively lower operational strain on insurance companies, albeit at a premium commission cost.
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Beyond the well-known insurers, several smaller and emerging life insurers also made meaningful commission payouts during FY2025. These include:
Even newer entrants such as Acko Life and CreditAccess recorded commission spends of ₹8 crore and ₹30 crore, respectively, underlining efforts to establish distribution networks in a highly competitive market.
According to Cafemutual’s detailed analysis, the consolidated commission payouts from all listed life insurers stood at ₹55,159 crore in FY2025. The breakdown in terms of money and percentage share gives insight into market dynamics:
| Life Insurer | Commission Paid (₹ Crore) | % of Total |
|---|---|---|
| LIC | 25,309 | 45.88% |
| HDFC Life | 7,835 | 14.21% |
| ICICI Prudential Life | 4,860 | 8.81% |
| Tata AIA Life | 4,175 | 7.57% |
| Axis Max Life | 3,145 | 5.70% |
| Aditya Birla Life | 2,010 | 3.64% |
| Kotak Life | 1,729 | 3.14% |
| Bajaj Allianz Life | 1,106 | 2.00% |
| SBI Life | 777 | 1.41% |
| Shriram Life | 612 | 1.11% |
These figures reflect the diversification in the Indian life insurance landscape, with a healthy mix of legacy institutions and new-age companies pursuing market presence through competitive commission strategies.
The ₹55,150 crore commission payout by Indian life insurers in FY2025 underscores how critical sales intermediaries remain in the distribution framework. While LIC continues its dominance through a vast agency model, private players are exploring aggressive bancassurance models to stay ahead. With growing competition and evolving distribution channels, commission structures are likely to remain a key lever in shaping insurer growth strategies.
Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks. Read all the related documents carefully before investing.
Published on: Jun 24, 2025, 2:11 PM IST
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