India’s insurance industry is on the brink of a significant digital transformation, with private investments in the InsurTech space projected to exceed $1 billion over the next 12 months, according to a joint report by The Digital Fifth and Perfios.
The report, titled “Reimagining Insurance: India’s Leap into the Future of Insurance,” outlines the evolution of the sector from a conventional agent-led model to a digital-first, platform-driven ecosystem. With insurance premiums exceeding ₹11.19 trillion in FY24 and rising adoption of digital channels, the groundwork for rapid innovation is being firmly laid.
Key trends highlighted include the surge of embedded insurance, increased adoption of AI and cloud-first architectures, and a shift in workforce skill requirements. The report also identifies five core pillars driving the transformation: tech-led investments, digital journeys, public infrastructure support, data-driven distribution, and a responsive regulatory environment.
Perfios’ InsurTech head, Prasad Krishnamorthy, emphasized the urgency for modernization, noting that digital sales still account for just 0.67% of new life insurance business. Tools like Perfios’ Insurance Operating System, which already powers 40% of cashless health claims, are driving up to 200% process efficiency and reducing fraud.
Despite rapid innovation, challenges persist. Insurance penetration in India remains low at 3.7%, far below the global average of 7%, pointing to a substantial protection gap—particularly in life, health, and micro-insurance segments. Initiatives like the National Health Claims Exchange (NHCX) and the upcoming Bima Sugam platform, alongside regulatory support from the IRDAI and the Digital Personal Data Protection Act (DPDPA), are expected to lay the digital foundation for inclusive, scalable growth.
