If the IRDA proposals are implemented, one would have more clarity on commissions received by PB Fintech Policybazaar from its insurance partners, which are currently booked under various heads, according to Kotak Institutional Equities.
The brokerage said that this will provide more insight into Policybazaar's business and increase Street's conviction on the business model.
Kotak noted that the IRDA has proposed to remove commission caps on various insurance products, which will give a lot of leeway to expand the scope of distributors. It said that this improves the negotiating power of distributors, even as most current distribution arrangements are driven by fair considerations.
Kotak said the distribution of insurance policies is complex and requires reach, education, nudge and sales motivation.
Corporate partnerships such as banks and Policybazaar play a more important role in educating, motivating and managing a large sales fleet, while some distributors provide last-mile reach to the customer.
This reduces the burden of the insurance company, who can focus on product, channel partnership and risk management but involves higher costs for the distributor. It said that restrictions on payouts restricted the role of distributors.