The sell-off in insurtech stocks continued for the second straight session today as the Insurance Regulatory and Development Authority of India’s (IRDAI) proposed overhaul of insurance distribution commissions rattled investors. 

Shares of Policybazaar parent PB Fintech fell as much as 7.8% to touch a fresh 52-week low of ₹1,115.10 on the BSE. Meanwhile, Turtlemint shares opened at their 20% lower circuit of ₹87.30, which was also the stock’s fresh all-time low.

The stocks later pared some of their losses. At 12:21 IST, PB Fintech was trading 5.12% lower at ₹1,148.10, with a market capitalisation of ₹53,128.6 Cr (about $5.5 Bn).

Turtlemint was trading 18.84% lower at ₹88.55, giving the insurtech company a market capitalisation of ₹2,607.6 Cr (about $272 Mn).

At the prevailing prices, PB Fintech shares have fallen about 39% across the two sessions, while Turtlemint has declined about 35% from its level before the sell-off began.

The rout began yesterday after IRDAI released a consultation paper proposing product- and channel-specific commission ceilings for insurance distributors. The proposed framework would reintroduce product-level commission caps more than three years after the regulator removed such limits in April 2023 and shifted to an expenses of management (EoM) framework. 

Under the proposed framework, commissions for insurance distributors would vary based on the product, distribution channel and effort involved in selling and servicing a policy. Open-architecture insurance distribution entities such as Policybazaar and Turtlemint’s insurance broking arm would generally face lower caps than individual agents and other distributors.

For digital insurance distributors, the proposed changes could put pressure on revenue from health, motor and life insurance, while forcing platforms to rethink customer acquisition costs and sales incentives.

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