- Building inclusive, tech-advanced, future-ready insurance models is a key priority.
- The report highlights the rise of embedded insurance, the expanding role of AI and cloud-first architectures, and the changing skill set needs of the sector’s workforce.
- The industry will shift from a traditional agent-led model to a platform-driven, modular, and customer-first ecosystem.
Mumbai: India’s insurance industry is at a crucial turning point and on the verge of digital transformation. The sector is poised for disruption and growth, with total insurance premiums surpassing ₹11.19 trillion in FY24 and digital channels accounting for an increasing share of new policies.
A joint report titled “Reimagining Insurance: India’s Leap into the Future of Insurance,” released by leading fintech and digital transformation advisory firm The Digital Fifth in collaboration with Perfios, India’s largest B2B SaaS TechFin, highlights these transformative trends. It also forecasts that private funding in the Insurtech industry is expected to exceed $1 billion in the next 12 months.
The report examines how insurers leverage technology to build agile, inclusive, and future-ready business models. It also highlights the shift from a traditional agent-led model to a platform-driven, modular, and customer-first ecosystem.
The report identifies five key shifts: Insurer-led tech investments, journey-level digital transformation, public infrastructure and government support, dynamic distribution and data, and regulation. It combines deep industry knowledge and insights from senior stakeholders across insurers, insurtech investors, and technology enablers. It maps the present and future of Indian insurance, framing key technology shifts, regulatory developments, and strategic imperatives.
“India’s insurance sector is on the brink of a transformative shift. With onboarding expected to be 80% automated in life insurance and over 90% of retail non-life claims moving toward real-time processing, we are entering a phase where efficiency and trust go hand in hand,” said Sameer Singh Jaini, Founder & CEO, The Digital Fifth.
He added, “This evolution is also mirrored in investor sentiment, where projected funding of around $1 billion in the coming year signals strong belief in the sector’s long-term potential. What is most promising is the parallel investment in core system modernization, smarter underwriting, and digital-first claims journeys. These foundational changes will elevate customer experience and redefine how insurers create, deliver, and sustain value in a dynamic ecosystem.”
“As this report highlights, India’s Insurtech sector is poised for significant growth, yet digital sales represent only 0.67% of new life insurance business,” said Prasad Krishnamorthy, Head of Insurtech at Perfios. “This gap underscores a tremendous opportunity. Insurance Operating System at Perfios, which already powers 40% of cashless health claims is enabling insurers to achieve up to 200% improvement in process efficiency, while also identifying fraud, wastage, and abuse. This report underscores the critical need for modernization that encompasses technology, trust, speed, and personalization, especially as we see a sharp rise in self-onboarding and DIY insurance journeys.” He added.
While India’s insurance sector is evolving rapidly, significant structural challenges continue to hold back its full potential. Insurance penetration dropped to 3.7% in FY24, with life insurance at just 2.7%—well below the global average of ~7% signaling an enormous protection gap, especially in health, life, and micro-insurance categories. Initiatives like NHCX (National Health Claims Exchange) and the upcoming Bima Sugam platform, the Government and IRDAI are laying robust digital rails for insurance innovation. The Digital Personal Data Protection Act (DPDPA) is expected to reshape how insurers manage customer data and design consent-based experiences.
