New Delhi, Jan. 29 -- India's insurance sector has been largely successful in deepening revenue from existing customers, but high distribution costs are preventing a 'widening' of the risk pool of customers, the Economic Survey for 2025-26 said.

The escalating cost of acquisition is not just "operational friction" for insurance but acts as a structural constraint on the sector's evolution, creating distortions that limit inclusion, erode consumer value, and threaten long-term stability, the survey added.

The high-cost model poses a risk to the core financial strength of insurers, with escalating acquisition and administrative costs resulting in increased operating expenses across both life and non-life insurance.

This is reflected in t...