Aviva Life India (interview): cutting weak distributors to improve persistency

In an interview with ETBFSI published in May 2026, Aviva Life Insurance MD and CEO Asit Rath describes how the insurer restructured its distribution. Its mix is now about one-third bank partnerships, one-third direct sales and one-third agency, so roughly 66% of business is proprietary. He says this was a conscious choice "because of our own history where we were dependent on banks".

Rath says Aviva is "cutting ties with poor distributors" and choosing distributors selectively, because some were not bringing the right business and customers staying until maturity is critical for a small player. He says the agency channel was deliberately restructured, which caused the only dip in FY26, and that mis-selling has been reduced by about 20% a year for three years, including by cutting ties with distributors and asking employees to leave.

By his account FY26 was strong: new business grew about 22%, led by group business, with bancassurance and proprietary channels recovering, and distribution expenses fell even as the industry's rose. Protection products grew almost threefold, moving from 2% to 6% of premiums. He also says Aviva avoids depending on large-ticket premiums of Rs 20-30 lakh a year, preferring smaller, long-duration savings.

All numbers in this case are self-reported by the CEO in the interview; the article provides no independent verification.

Self-reported: about 22% growth in FY26, nearly two-thirds of business via proprietary channels, protection products from 2% to 6% of premiums.

Dependence on bank partners in the past left Aviva exposed to a small number of distributors.

After expense-of-management rules, distributors demanded larger shares of the commission pool, raising acquisition costs.

Persistency matters most to a small insurer's profitability, so low-quality distributors were dropped.

Staggered commissions would, in Rath's view, lower distribution costs for the whole industry and favour Aviva, which has no sticky bank-shareholding partner.

A mid-sized insurer cannot match bank-backed rivals on cheap distribution, so it can win by controlling its own channels and dropping partners who bring poor-quality business.

Rath says some sales dipped because of the stricter approach but expects longer customer relationships. His FY27 priorities are more proprietary distribution, stronger group business, a better long-duration back book and sharply lower costs, with growth guided to stay double-digit. He says solvency is 1.88%, down from 1.93%, and Aviva has not borrowed capital from its parents for at least three years.