ICMAI has launched the INSCOST Framework to strengthen cost management, transparency, governance and assurance across India’s insurance sector
New Delhi: The Institute of Cost Accountants of India (ICMAI) has introduced the INSCOST – Cost Management, Cost Governance, Cost Disclosure & Cost Assurance Framework for the Indian Insurance Sector. The first edition of the framework aims to help insurers improve cost discipline, transparency, governance and assurance.
ICMAI said the framework comes at an important time as India works towards the ‘Insurance for All by 2047’ vision and the broader goal of building a Viksit Bharat. Better cost management, according to the institute, can help insurers improve efficiency, sustainability and value for policyholders.
The INSCOST Framework brings together guidance on cost records, cost management, cost governance, cost disclosure and cost assurance. It also covers areas such as strategic cost management and product profitability.
The framework applies to different segments of the insurance industry, including life insurance, general insurance, health insurance, reinsurance and public-sector insurance entities.
ICMAI has adapted its Cost Accounting Standards, Cost Auditing Standards and Generally Accepted Cost Accounting Principles to the specific economics of insurance. The framework also aligns these principles with the regulatory structure of the Insurance Regulatory and Development Authority of India (IRDAI).
Focus on Insurance Costs and Profitability
The framework provides guidance on areas including cost allocation, Expenses of Management, claims costs, distribution expenses, bancassurance and government-sponsored insurance schemes. It also encourages insurers to use cost analytics to understand product-level profitability.
ICMAI President CMA Chittaranjan Chattopadhyay said sound cost management and governance will become increasingly important as the Indian insurance sector expands.
The framework also stresses that insurers should look beyond claims management and pay greater attention to acquisition, procurement and operational costs. Better control over these expenses can support underwriting discipline and improve efficiency.
ICMAI Vice President CMA Manoj Anand said the framework aims to make cost information more useful for decision-making across the insurance value chain.
Cost Maturity Model for Insurers
INSCOST introduces a Cost Maturity Model along with a phased implementation roadmap. The approach allows insurers to strengthen their cost management and assurance systems based on their size, capabilities and level of readiness.
The framework also highlights opportunities for Cost and Management Accountants in areas such as product profitability, claims cost analysis, operational efficiency, distribution costs, budgeting and process optimisation.
The launch comes shortly after the IRDAI Public Consultation Paper on ‘Reforms for Recalibrating Economics of Insurance Distribution’, issued on September 23, 2026. The consultation has a direct connection with issues such as cost rationalisation, Expenses of Management, commissions and cost transparency.
ICMAI said the INSCOST Framework can help insurers, boards, regulators and professionals build stronger cost governance practices while supporting more efficient and sustainable insurance products.
