The Insurance Regulatory and Development Authority of India (IRDAI) chairman Debasish Panda said, on February 21, that India is moving towards personalised and instant insurance, highlighting the use of modern technologies including ChatGPT, web 3.0 and public blockchain to build such offerings. This underscores the prospects for the innovations of insurtech startups.
This comes at a time when insurtech startups are seeing increasing interest from venture capital firms. Recently, InsuranceDekho raised $150 million in a Series A round funding, insurtech unicorn Acko too is in the process of raising around $100 million in an upcoming round and Digit heading for an IPO.
Speaking at the Indian Venture and Alternate Capital Association (IVCA) Conclave 2023, Panda said that as per the latest global fintech adoption index, India's leading fintech has an adoption rate of 87 percent, which is substantially higher than the world average.
“ChatGPT, which is one of the classic disruptions, the popular AI chatbot amassed over 100 million users in just about two months and it's already changing the way the world functions,” he said.
He added, “The world is also becoming more and more digital with India being a pioneer in tech and digital. India stack, UPI, aadhar, and the account aggregator, all put together are a base for financial services. What used to take days, is now being done in seconds.”
Web 3.0 will soon be a reality and India and has a lot to offer there, he said.
Public blockchain would further enable insurance smart contracts to include all details in the book which will be programmed to monitor live data and react accordingly, triggering an instant payout in real time.
Personalised insurance
Panda said, “For insurance, times are changing. We will be venturing into the world of continuous underwriting and seamless insurance.”
He explained, for instance, drivers will see how the insurance costs fluctuate -- depending on the route they travel, the state of the roads etc.
The way conventional insurance has been offered will also be altered and as a result of this highly tailored insurance, companies will be able to quickly handle massive data sets from several sources using quantum computers, revolutionising risk modelling and decision making, he said.
Panda said, “We are all moving towards the program the world says ‘Planet personalized’. Young millennials and Gen Z want everything on a tap and it has to be flexible, both in terms of what is covered and how they pay. They are looking for products that they can customise to their specific needs.”
“Change is also coming from a very non-millennial cohort. The older people are living longer and expecting more out of their time. And that's causing a new financial and care challenge. There is a need to create more flexible retirement plans.”
According to Panda, most policyholders today want ‘do it yourself’ or a self-service approach to determine the best personalized options available to them. This has led to the rise of various advisory technology and tech tools like digital assistants.
Investments into startups
IRDAI had also extended its regulatory sandbox timeline to 36 months in a relief to financial services players and startups to continue experimenting with newer innovations and unique insurance solutions.
Panda spoke about easing institutional funding which will benefit startups too. Insurers can now invest in AIFs and fund of funds too, gaining exposure to non-listed entities.
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