Artificial intelligence is transforming India’s insurance industry, moving the sector beyond routine digitisation towards a more intelligent and data-driven way of working. From risk assessment and premium pricing to claims settlement, fraud detection and customer service, insurers are increasingly using AI to improve decisions, streamline operations and provide more personalised services.
At HDFC ERGO General Insurance, this transition has become an important part of the company’s business strategy. Sriram Naganathan, President and Chief Technology Officer of HDFC ERGO General Insurance, believes technology is evolving from a support function into a strategic driver of the insurance business.
Traditionally, insurers measured technological progress through operational efficiency, system reliability, processing speed and the digitisation of existing procedures. Advances in artificial intelligence, machine learning, generative AI and agentic AI are now changing that approach. Technology is influencing how insurers evaluate risks, design products, calculate premiums and respond to customers.
The insurance business depends heavily on data and risk assessment. Insurers must evaluate the likelihood of potential losses, determine appropriate coverage and establish premiums that reflect the risks involved. The ability to interpret information accurately is therefore becoming increasingly important for companies seeking to improve efficiency and remain competitive.
From digital transactions to intelligent insurance
HDFC ERGO has used conventional AI and machine learning for several years to support underwriting, pricing, fraud detection and claims assessment. The company is now expanding these capabilities through generative AI and AI agents, which can help interpret information and carry out defined tasks.
According to Naganathan, approximately 95 per cent of the company’s insurance policies are issued digitally, while around 88 per cent of service interactions take place through digital channels. Nearly 10 per cent of those interactions are AI-led, reflecting the growing role of intelligent systems in customer service.
The company’s Here application ecosystem illustrates this development. Naganathan said the platform had recorded more than 12 million downloads, with a substantial proportion coming from people who were not existing customers.
One of its features, Know Your Policy, uses generative AI to explain insurance policies in simpler language. Customers can ask questions in everyday terms and receive explanations about coverage, payable benefits and exclusions.
Insurance documents often contain technical language and detailed conditions that can be difficult for policyholders to understand. Customers may struggle to determine which expenses are covered, what benefits they can claim and which circumstances fall outside their protection.
AI-powered explanations can make these details more accessible, helping customers understand their policies without having to interpret every clause independently. Such tools do not alter the contractual terms of an insurance policy, however. Their usefulness depends on the accuracy of the explanations and their consistency with the original documents.
Human judgement remains essential
Although AI is becoming more influential in insurance operations, HDFC ERGO is not treating the technology as a complete replacement for human professionals. Instead, the company aims to use AI to strengthen decision-making and reduce the burden of repetitive work.
Straightforward, low-value claims may be suitable for greater automation because they can often be assessed against established criteria. Complex or high-value claims, particularly those involving sensitive personal circumstances, may require experienced professionals to examine the evidence and exercise judgement.
This approach allows insurers to automate predictable tasks while retaining human oversight where expertise and careful assessment remain necessary. Employees can spend less time on routine administrative work and devote more attention to cases that require investigation or individual consideration.
The distinction is particularly important in claims management. Customers seeking insurance benefits may be dealing with road accidents, medical emergencies or other stressful circumstances. In such situations, a quick response is valuable, but fairness, clear communication and appropriate support matter just as much.
AI can help employees access relevant information and process routine requests more efficiently. It cannot, however, remove the need for professional accountability or the ability to recognise circumstances that fall outside standard procedures.
Faster claims assessment and fraud detection
Claims settlement is one of the most significant areas in which AI can influence the insurance customer experience. Insurers must process legitimate claims efficiently while identifying suspicious activity without placing unnecessary obstacles in the way of genuine policyholders.
HDFC ERGO has been using traditional AI models to assess images and videos submitted for motor insurance claims for more than six years.
Under the system described by Naganathan, customers can receive a link through WhatsApp that activates a guided camera experience on their smartphones. They use the feature to capture photographs of vehicle damage, which are then analysed by an AI model. The resulting assessment helps surveyors evaluate the damage and respond more quickly.
Image-based analysis can reduce some of the manual effort involved in reviewing motor claims. It also allows customers to submit visual evidence through a familiar digital channel, potentially making the process more convenient.
The company is exploring generative AI to strengthen its assessment capabilities further. In health insurance, AI agents are being considered and deployed for repetitive administrative activities, while human professionals remain involved in complex claims and sensitive customer interactions.
By allowing straightforward cases to progress with fewer manual steps and directing suspicious cases for additional investigation, insurers can seek to improve both efficiency and customer satisfaction.
These systems nevertheless require appropriate safeguards. Poor-quality images, incomplete documentation or unusual circumstances can affect an automated assessment. A claim flagged for further scrutiny should not automatically be treated as fraudulent. Human review remains important when evidence is unclear or a decision could have significant consequences for a policyholder.
Turning years of data into useful insights
HDFC ERGO has accumulated approximately two decades of information covering underwriting, claims and customer experience. The challenge is no longer simply to collect data, but to convert it into insights that can support better business decisions.
The company is developing its data capabilities to connect information across underwriting, customer service, claims management and distribution. A more integrated approach can help employees access relevant information efficiently and enable the business to identify patterns across different functions.
The scale of its operations highlights the importance of these capabilities. Naganathan said the company handles close to 30 customer interactions per minute and issues approximately 82 insurance policies every minute.
Managing operations at this scale requires systems that can process information consistently and help employees make informed decisions. AI can contribute by identifying patterns, interpreting customer behaviour and making relevant information available when it is needed.
For example, the analysis of claims information may help insurers recognise recurring patterns, while customer-service data can reveal common questions or difficulties faced by policyholders. Such insights can inform operational improvements and help organisations direct resources towards areas where they are most needed.
However, the increased use of automated decision-making also raises questions about transparency, data protection and accountability. Decisions affecting premium prices, risk assessments, fraud investigations or claims outcomes can have direct financial consequences for customers.
Naganathan emphasised that trust remains fundamental to insurance. Insurers must therefore establish appropriate governance arrangements and ensure that important decisions can be explained. Technology should support responsible decision-making rather than make it harder for customers to understand how an outcome was reached.
Technology investment guided by business priorities
The transition towards intelligent insurance is also influencing how companies approach technology investment. Rather than modernising systems simply to adopt the latest tools, HDFC ERGO is focusing on investments that deliver identifiable business benefits.
Naganathan said innovation and modernisation should complement each other. Insurers need to introduce new capabilities while maintaining the reliability, security and long-term sustainability of their technology infrastructure.
Over the past 18 months, the company has moved towards developing more of its own technological capabilities rather than relying primarily on purchased software and software-as-a-service products.
Its accumulated insurance data and industry-specific knowledge provide a foundation for developing tools suited to its business requirements. The company is strengthening its engineering capabilities and developing its own AI models while continuing to use underlying technologies supplied by major technology providers.
This strategy does not require every component to be developed internally. Widely available technology can meet common requirements, while specialised systems may offer greater value where an insurer’s own data, expertise and processes provide a distinctive advantage.
For insurance companies, this distinction can be important. General-purpose software may support routine business functions, but underwriting, claims assessment and policy interpretation often involve specialised rules and industry-specific information.
Developing tailored capabilities in these areas may help insurers improve their processes, provided the benefits justify the costs of development, implementation and ongoing maintenance.
Smaller AI models and autonomous agents
The next stage of enterprise AI adoption could involve greater use of smaller, specialised language models alongside larger, general-purpose systems.
Smaller models may be suitable for specific business tasks, depending on requirements involving cost, processing speed, security and data sensitivity. For insurers handling confidential financial and personal information, choosing appropriate models and establishing clear safeguards will be particularly important.
HDFC ERGO is also piloting AI agents for low-value retail health and motor insurance claims. These systems can support activities such as document verification, image-based assessment and routine claims adjudication.
Unlike conventional automation, which generally follows predetermined rules, AI agents can be designed to carry out a sequence of related tasks within defined limits. In an insurance setting, this could help connect information gathering, document checks and preliminary assessments within a more streamlined workflow.
The potential benefits include faster settlements, reduced administrative work and more efficient identification of suspicious claims. Yet greater autonomy also increases the need for effective oversight.
Insurers must establish which decisions an AI agent can make independently, which require human approval and when a case should be referred for further investigation. They must also determine how errors will be identified, decisions reviewed and responsibility assigned when an automated system produces an incorrect result.
Data quality and explainability will remain central to this process. The ability to automate a task does not, by itself, mean that it should be carried out without human supervision.
Personalisation becomes the next priority
The difference between a digital insurer and an intelligent insurer lies partly in how effectively technology responds to individual customer circumstances.
A conventional digital system might send every policyholder the same renewal reminder at a predetermined time. An intelligent system could instead consider a customer’s preferences, behaviour and previous interactions to determine the most appropriate time and communication channel.
This represents a shift from schedule-based automation towards services that take context into account.
For customers, the change could mean more relevant communication, easier access to policy information and fewer unnecessary steps when seeking assistance or submitting claims. AI may also help customer-service teams understand the nature of an enquiry more quickly by making relevant information from previous interactions available.
Personalisation must nevertheless be handled responsibly. The use of customer data requires appropriate safeguards, and insurers need to avoid making assumptions that could result in unsuitable recommendations or confusing interactions.
Accessibility is another consideration. Some customers may prefer mobile applications and automated assistance, while others may need direct contact with a human representative. An intelligent insurance system should accommodate these different needs rather than make digital channels the only practical route to support.
This is especially important when customers are dealing with accidents, hospitalisation or other difficult circumstances. They may need reassurance and understanding alongside efficient processing. AI can help employees respond more effectively, but empathy and professional judgement remain essential.
Building an AI-enabled insurance future
HDFC ERGO’s approach reflects a broader transition across India’s insurance industry, where digital infrastructure is increasingly being combined with intelligent systems, specialised AI models, customer data platforms and automated workflows.
The objective is not necessarily to create an entirely autonomous insurance business. Instead, insurers are seeking to reduce unnecessary administrative burdens, improve risk assessment and provide employees with better information to support their decisions.
The shift also changes how technology creates value. Digitisation enables customers to access services electronically, while intelligent systems can help interpret information, identify patterns and support responses tailored to particular circumstances.
The benefits will depend on how effectively these capabilities are integrated into existing operations. New systems must work reliably, complement established processes and deliver measurable improvements without introducing unnecessary complexity.
Responsible adoption will be equally important. Insurance decisions can affect the financial security of individuals and businesses, making transparency, data protection and accountability essential. Customers must have confidence that their information is handled appropriately and that important decisions remain subject to suitable controls.
As AI becomes more deeply embedded in insurance operations, companies that combine technological innovation with responsible governance and human expertise may be better positioned to improve efficiency and customer experience.
The transition from digital insurance to intelligent insurance is therefore more than a software upgrade or an infrastructure modernisation exercise. It represents a wider effort to make insurance services more responsive, accessible and efficient while preserving the fairness, accountability and trust on which the industry depends.
