The journey to 2040 for the Indian insurance industry can take several paths, shaped by global megatrends, shifting customer expectations, and transformative technologies like artificial intelligence. At a recent “Insurance Forward” roundtable organised by SAS and FinancialExpress.com, following a scenario-led presentation by the Economist Intelligence Unit (EIU), industry leaders in Mumbai came together to discuss the most pressing opportunities and challenges the industry must navigate on the road to 2040.
Barsali Bhattacharyya, Deputy Director, Economist Intelligence Unit, presented four potential scenarios for the insurance industry in India based on a survey: “Adaptation in a fragmented, unequal world” where insurers might struggle with disparate regulations and social divides; “Customer-centred transformation takes hold,” emphasising hyper-personalisation and seamless digital experiences; “Insurers spur climate resilience,” positioning the industry as a key enabler of environmental stability; or a “Struggle to adapt in a poly-crisis world” if innovation and collaboration falter.
With India having the largest population in the world, insurance leaders agree that there will always be demand for insurance. What will change is the nature of this demand: from standardised products to personalised insurance, covering health, general and life. Yet, there are risks to the industry, predominantly from climate change, as outlined by an EIU research survey – this would alter the way insurers assess and manage risk. Stefan De Lombaert, Senior Director, Insurance Risk and Fraud Head, SAS, emphasised this in his presentation on enterprise decision-making, highlighting that an integrated system and coordinated decision-making can lower costs in the long term.
Preceding the roundtable, a panel of experts comprising Gaurav Chaudhri, Chief Technology Officer, Reliance General Insurance; Amol Godha, Chief Analytics Officer, Reliance Nippon Life Insurance Company; Kshitij Sharma, EVP and Appointed Actuary of Tata AIA Life Insurance Co Ltd; Bhattacharyya of the EIU, and De Lombaert of SAS, discussed the evolving role of Intelligent Decisioning and how insurers can strike the right balance between intelligence, technology and accuracy.
Chaudhri noted the risks of adopting AI based on legacy data, which can lead to improper decision-making, flawed outcomes, and eroded trust. Godha emphasised that India’s insurance landscape is changing fast, with younger demographics, rising affluence, and higher digital penetration, pushing insurers to make decisions faster and more accurately. This is where AI can create real value. Sharma added that from a life-insurance perspective, the underwriting process can take place quicker with the help of AI. However, De Lombaert cautioned that with more reliance on electronic data, the risk of fraud also increases manifold, demanding robust safeguards.
AI and machine learning (ML) are now becoming central to insurance operations, from underwriting and claims processing to fraud detection and even customer servicing. However, this revolution could come with its own set of challenges, mainly in data privacy and cybersecurity. A roundtable following the panel discussion addressed some of these key challenges that insurers face.
Leading the conversation, Sharma said, “India will have to deal with new data privacy laws and guard against cyberattacks.” Following up, Godha, agrees: “One of the key challenges is data confidentiality. India’s current insurance infrastructure setup is not ready for AI.”
Regulators will have to be more vigilant – sensitive customer data will need to be protected by robust governance frameworks. “The BFSI space is well-regulated. What changes now is that with AI being used to disrupt business models, it has to be customer-driven,” says Francis Rodrigues, Senior Vice President, E-commerce and Digital Marketing, HDFC Life Insurance Company. “In life insurance, a large part of risk is with reinsurers,” he says, pointing to the changing dynamics of risk for the future.
The conversation also turned to integration challenges. Integrating legacy systems and siloed data will be crucial for the insurance industry if it is to truly embrace the power of AI. As Vivek Zakarde, Head of Data Operations, India First Life Insurance Company Ltd points out: “Data exists in siloes in each department. The challenge is how we can consolidate it and integrate it with legacy systems.”
Gulshan Setia, Vice President and Head – Underwriting, Pramerica Life Insurance, reaffirms this, saying: “Automation is a lasting legacy of the pandemic. We are looking at AI as a tool. One of the challenges is data bias.” Sujit Sankhe, Head of Underwriting at Reliance Nippon Life Insurance, has a slightly different view. He says legacy systems won’t change with AI in life insurance. “In life insurance, we have to issue a policy for 40-50 years, so we have to take a long-term view, which may not be possible for AI to predict.”
With globalisation now coming under pressure with recent geopolitical events, the industry may be looking at more localised or regionally tailored insurance solutions, as the EIU report suggests. Some demographic shifts will also call for flexible products that can adapt to different life stages. As Dhruv Patel, Lead – Digital Initiative and Strategy, Star Union Dai-Ichi Life Insurance Company Ltd, says: “Maintaining the kind of data needed and developing a model could be a barrier for the industry.”
At the same time, economic and social inequalities in India could see insurers developing products that cater to different socio-economic categories. After all, the Indian government has a vision for “Insurance for all” by 2047 that supports outreach at scale.
The leaders see AI playing a significant role in proactive risk management. Setia says “The biggest use case of AI would be in fraud mitigation. The question is, how fast can it be integrated?” Legacy systems pose a challenge. De Lombaert of SAS says, “There are several challenges of integrating a digital vs a legacy system. For example, you will have to reprice the term insurance at the end of the term.”
Deepa Duraisamy, Head, Data at Edelweiss Life Insurance, raised critical questions: “How do you measure ROI in deploying AI? Identifying it is a challenge. How do you know if it was AI or other parameters that worked?” Rodrigues reiterated, “AI will disrupt business models, but in the end, it has to be customer-driven.” Patel added that most AI applications in insurance today are still in the experimental and early adoption stage, with potential increasing when robust, multi-touchpoint customer data is abundantly available.
Building on these scenarios, the future of the Indian insurance industry lies in being able to leverage AI responsibly and prioritise customer needs. The challenges, at the moment, are still holding the industry back. To reach the promise of 2040, insurers must modernise their systems, democratise data, and embed AI into the fabric of their operations, with customers at the core and trust as the foundation.