Insurance industry sees rapid growth and faces AI integration hurdles

The Indian insurance sector has expanded dramatically over the past decade, with life insurance premiums increasing 2.5–2.6 times and general insurance premiums rising 3.6 times, according to the Insurance Regulatory and Development Authority of India (IRDAI). Brokers now account for about 42% of general insurance business, up from roughly 30% several years ago, reflecting a shift toward advisory roles.

Regulators are tightening cost discipline: recent measures include scrutiny of high commission costs, withholding performance‑linked pay for CEOs who miss cost targets, and a proposal to raise the combined investment limit for insurers in REITs and InvITs from 3% to 6%.

Across the broader insurance industry, adopting artificial intelligence (AI) has proved challenging. While AI can accelerate isolated tasks like quote routing, fragmented legacy systems often prevent these gains from scaling. Hiscox reported modest improvements after redesigning quote‑to‑bind workflows before adding AI, highlighting the importance of targeting bottlenecks rather than deploying technology indiscriminately. Experts recommend focusing AI pilots on clear business problems and measuring impact before wider rollout.