Archive · 28 Sep 2026
Generali Central Warns EoM Cuts Could Strain Smaller Insurers
Generali Central is an insurance company whose business fell during April-August.
This happened partly because insurers charged less for some types of coverage.
Fire, property, engineering, crop and group health insurance all faced strong price competition.
The company also chose not to renew some policies because the lower prices made them unprofitable.
Its chief executive expects the pricing problem may improve in one or two years.
A proposed IRDAI rule would limit how much general insurers can spend on managing their businesses.
The chief executive says the same limit may be difficult for smaller companies because they still need compliance, legal, actuarial and technology teams.
He also says banks should continue selling insurance, but proposed commission restrictions may change how distribution channels operate.
Generali Central’s gross direct premium income fell 17% during April-August amid declining rates in several insurance segments.
Industry premiums in fire, property and engineering insurance reportedly declined 25-30%, while crop and group health insurance also faced rate competition.
Managing Director and Chief Executive Officer KG Krishnamoorthy Rao said pricing pressure could ease over the next one to two years.
About 9% of Generali Central’s business comes from bancassurance, with agency, direct-to-consumer and aggregators also important channels.
Rao said reducing the expenses-of-management limit by 5% in two years would be ambitious and urged different limits for insurers of different sizes.
- Who
- Generali Central Insurance Company and its Managing Director and Chief Executive Officer KG Krishnamoorthy Rao.
- What
- The insurer reported a 17% fall in gross direct premium income and discussed pricing pressure, distribution reforms and proposed expenses-of-management limits.
- When
- The premium decline occurred during April-August; Rao discussed possible market changes over the next one to two years.
- Where
- India’s general insurance market.
- Why
- Falling premium rates, strong competition and proposed Insurance Regulatory and Development Authority of India reforms affected the company’s business and operating outlook.
Generali Central’s concerns
IRDAI’s reform objectives
Expenses-of-management limits
Generali Central’s concerns
KG Krishnamoorthy Rao says a single 20% limit may disadvantage small and mid-sized insurers, which can have higher fixed expenses relative to premium income.
IRDAI’s reform objectives
The Insurance Regulatory and Development Authority of India has proposed lower expenses-of-management limits as part of its distribution reforms.
Distribution restrictions
Generali Central’s concerns
Rao expects reduced commissions to challenge existing cost structures and could make it harder for some channels to sustain their networks.
IRDAI’s reform objectives
The reforms aim to prevent banks from pushing insurance products customers do not want and to improve transparency.
Bancassurance
Generali Central’s concerns
Generali Central expects banks to remain able to serve their captive customers, although the distribution mix may change.
IRDAI’s reform objectives
The proposed restrictions seek to ensure bank-linked insurance sales are driven by customer need rather than product-pushing.
- Premium change
- Generali Central’s gross direct premium income fell 17% during April-August.
- Affected segments
- Fire, property, engineering, crop and group health insurance faced pricing pressure.
- Industry decline
- Premiums in fire, property and engineering insurance declined 25-30% at the industry level, according to Rao.
- Bancassurance share
- About 9% of Generali Central’s business comes from bancassurance.
- Major banking partner
- Central Bank of India is a parent entity and an important bancassurance partner.
- Proposed EoM limit
- The expenses-of-management limit for general insurers has been reduced to 20%.
- Rao’s assessment
- A 5% reduction in the EoM limit after two years would be very ambitious.