Technology and AI Can Help Lower Insurance Costs, Says DFS Secretary

Technology and AI can play a crucial role in lowering insurance premiums in India, according to M Nagaraju, Secretary of the Department of Financial Services. Speaking at the 24th Global Conference of Actuaries, he highlighted how improved actuarial calculations through advanced technology can make insurance more affordable. India aims to provide universal insurance coverage by 2047, yet the current penetration rate stands at only 3.7%, significantly lower than the global average of 7%. Nagaraju urged actuaries to leverage analytical tools to design better policies and enhance risk assessment accuracy.

AI-driven insights can help optimize pricing while blockchain technology is improving transparency and security in financial transactions. Secure data management can build trust in the sector, further driving insurance accessibility. The adoption of these innovations can accelerate the growth of India’s insurance industry and support its broader financial inclusion goals.

Technology and AI Can Help Lower Insurance Costs, Says DFS Secretary

M. Nagaraju, Secretary of the Department of Financial Services, recently emphasized how technology and data analysis tools can significantly reduce insurance costs. This, in turn, supports India’s goal of providing insurance coverage for every citizen by 2047. Speaking at the 24th Global Conference of Actuaries, he highlighted the importance of modern tools such as artificial intelligence (AI) in refining insurance cost calculations, ultimately making premiums more affordable.

Nagaraju noted that by 2047, India aspires to become a developed nation, and a crucial aspect of this vision is ensuring universal access to insurance. Currently, the country’s insurance penetration stands at just 3.7%, significantly lower than the global average of 7%. This indicates that a large portion of the population remains uninsured. To bridge this gap, he urged actuaries—professionals specializing in financial risk analysis—to adopt advanced tools and technologies to design better, more affordable insurance policies.

A key technology he highlighted was AI. By leveraging AI, actuaries can improve risk assessment and pricing accuracy. AI can analyze vast amounts of data to identify patterns and predict risks more efficiently than traditional methods. This enables fairer insurance pricing, making policies more accessible to a broader segment of the population.

In addition to AI, Nagaraju underscored the role of blockchain technology in the insurance sector. Blockchain enhances transparency and security in financial transactions, ensuring that claims and payments are processed securely and efficiently. This not only reduces fraud risks but also builds customer trust, encouraging more people to opt for insurance coverage.

Nagaraju’s message was clear: technology has the potential to make insurance more affordable and accessible. By integrating AI and blockchain, the insurance industry can enhance its services and extend coverage to a larger population. This is particularly important in India, where a significant portion of citizens still lacks insurance.

He also emphasized the need for collaboration among actuaries, insurers, and policymakers. By working together, they can develop innovative solutions tailored to the unique challenges of the Indian market. For instance, creating insurance policies that address the needs of low-income and rural populations can help increase coverage.

Nagaraju’s vision aligns with India’s broader goal of becoming a developed nation by 2047. Universal insurance coverage is not just about financial security—it also contributes to overall economic stability. When more people are insured, they are better protected against unforeseen events such as accidents, illnesses, or natural disasters. This reduces the financial burden on both families and the government, allowing resources to be allocated more effectively for national development.

In conclusion, M. Nagaraju’s remarks underscore the transformative potential of technology in the insurance sector. By embracing AI and blockchain, India can make insurance more affordable, transparent, and accessible. This will not only help achieve the goal of universal insurance coverage by 2047 but also support the country’s progress toward becoming a developed nation. The expertise of actuaries and other professionals is crucial in driving innovation and ensuring that insurance policies meet the needs of all citizens.