The Reserve Bank of India (RBI) has identified high-cost distribution strategies as a primary concern within the insurance sector, noting that premium growth is increasingly driven by these methods rather than operational efficiency. While not posing immediate systemic risks, the RBI's financial stability report warns that elevated expenses could weaken profitability and amplify vulnerabilities. The report advocates for cost rationalization, better intermediary incentives, and wider adoption of technology-enabled distribution models to improve consumer value and sector resilience.