Insurance Stock : Life insurance companies have reduced distributor commissions. CNBCTV18 has exclusively learned that the reductions took effect on October 1st. SBI LIFE and HDFC LIFE traded weakly today due to this news. According to sources, commissions on premiums and renewals have been cut. Distributors’ commissions have been cut by up to 18%. The commission reductions took effect on October 1st.
This decision will reduce commission rewards on term, savings, ULIPs, and annuities. This will reduce the negative impact of the GST reduction on these companies. Distributors include web aggregators, individual bank agents, and brokers. Distributors have been informed of the commission reduction through letters.
With this move, life insurance companies have passed on the loss of ITC to distributors and agents. This will not cause any loss to life insurance companies but will put pressure on distributors like PB FINTECH.
The impact of the cut on PB Fintech
This cut could have a significant impact on PB Fintech. It could negatively impact the company’s revenue by 15-18%, EBITDA by 25-30%, and EPS by 30-35%. Furthermore, this move could put pressure on LIC, HDFC Life, ICICI PRU, and SBI Life.
Market experts say that the commission cut will impact PB Fintech. But from a broader perspective, the insurance sector holds great opportunities in the long term. Their penetration in India is still very low. There is a huge market for them here. The impact of the commission cut on PB Fintech will last only for 2-3 quarters. From a longer perspective, good growth is expected in this stock. If PB Fintech falls due to this news, then it will be a good opportunity to add it to the portfolio. However, today this stock closed at Rs 1700.50 with a gain of Rs 24.70 i.e. 1.47 percent.
