AI is Reshaping Indian Underwriting, Not Just Buzz

When ICICI Prudential rolled out its pilot AI underwriting engine last quarter, the time to issue a new motor policy dropped from a typical three‑day cycle to just a few hours, proving that the technology can deliver speed gains that were once the domain of the big global players.

Wearable data is no longer a fringe experiment. AIG India, for example, has begun incorporating heart‑rate and activity logs from smart bands into its health underwriting, allowing a more granular risk assessment for high‑net‑worth clients who otherwise would be lumped into broad categories.

IRDAI’s recent clarifications on the use of alternate data for underwriting have removed a significant regulatory hurdle, encouraging insurers to tap into third‑party datasets while still maintaining the required transparency and auditability.

The FY26 performance report, which highlighted a 54% jump in underwriting losses to Rs 46,632 crore, underscores the urgency of these innovations; AI‑driven loss‑control models can surface underwriting inefficiencies that cost insurers billions.

Beyond speed, AI is enabling micro‑segmentation. By clustering policyholders on the basis of behavioral and biometric inputs, insurers can create hyper‑personalised premiums that reflect true risk, a trend that Niva Bupa’s deputy CEO already cited as a strategic priority.

Yet the transition is not without friction. Data quality remains uneven across regions, and the need for skilled data scientists competes with the traditional underwriting talent pool, forcing firms to rethink training pathways.

For Indian insurers, the message is clear: AI is not a buzzword but a core component of the next underwriting paradigm. Those who build robust data pipelines, embed ethical AI governance, and upskill their workforce will shape the market, rather than be reshaped by it.