According to NITI Aayog's Sanjeet Singh at the Global FinTech Fest 2026, artificial intelligence alone cannot close India's insurance gap. The government is targeting to raise insurance penetration from 3.7% to 4.7% as part of its universal insurance coverage goal, but this expansion requires industry collaboration to address accessibility, affordability, awareness and trust alongside technology adoption. Singh emphasized that AI should be viewed as an enabler rather than a standalone solution, with the government seeking discussions with private-sector companies to develop collaborative approaches for serving the 'missing middle' demographic. As reported by The Economic Times, Singh noted that AI and insurance, AI and national goals, AI and whatever doesn't have to be discussed as separate subjects. AI is a tool that should be integrated with broader development objectives. The government's approach focuses on making money while meeting India's wider development objectives, inviting insurers to work collaboratively on expanding coverage rather than expecting either sector to tackle the problem alone.
The primary challenge identified is India's 'missing middle' segment - individuals who fall between government-supported insurance programmes and the traditional private insurance market. As reported by The Economic Times, Singh noted that the private sector cannot cover the bottom of the pyramid, making it essential to define shared responsibilities between government and private insurers. The government's role is to encourage and enable the private sector rather than expect it to solve the entire insurance coverage challenge on its own. Singh warned that greater use of AI should not create another layer of exclusion, particularly for people who lack reliable internet access or digital capabilities, highlighting the need for inclusive technology deployment. NITI Aayog has already held discussions with private-sector players on developing a collaborative solution for this segment, with Singh emphasizing that this is not a problem that the government has to solve... This is an opportunity also.
According to PB Fintech Joint Group CEO Sarbvir Singh, the commonly used measure of insurance premiums as a percentage of GDP does not show whether households have sufficient financial protection. The industry's average life insurance cover is around ₹4 lakh per policy, compared with an average sum assured of about ₹81 lakh among Policybazaar customers. This distinction is significant because owning an insurance policy does not necessarily mean adequate coverage for major financial shocks. The government's SBI General ecosystem covered around 2.39 crore policies in the previous year, indicating substantial scale potential, but the industry would need to bring substantially more individuals, businesses and properties under insurance to achieve universal coverage. As reported by The Economic Times, SBI General Insurance MD & CEO Naveen Chandra Jha said scale would be critical to increasing insurance coverage, adding that AI could help insurers combine scale, convenience and intelligence.
SBI General's Jha highlighted that greater AI adoption means insurers will increasingly rely on customer data for underwriting and personalized products, making consumer trust a critical precondition to personalization. According to customer research, more than 80% of customers are concerned about protecting their data, while around two-thirds are willing to share information in return for personalization. Jha emphasized that trust is a precondition to personalisation, with insurers needing to distinguish between core information required for underwriting and optional data. Optional information such as lifestyle and wellness information should operate within a consent-based framework, with consumers receiving clear benefits for sharing it. For example, wellness information such as step counts could be used to offer customers certain benefits that could subsequently be withdrawn if consent is revoked. The panel also called for greater insurance and risk literacy, with many Indian consumers understanding insurance importance only after experiencing financial or health shocks.
The COVID-19 pandemic increased health insurance awareness, while rising per-capita incomes have improved consumer ability to purchase coverage. As reported by The Economic Times, technology deployment will extend throughout the insurance value chain including customer onboarding, underwriting, risk assessment, pre-authorisation and claims settlement. Prudential Health India MD & CEO (Designate) Amit Dave said new-age insurers have an opportunity to build the insurance proposition around both higher penetration and adequate coverage. The panel highlighted the need for improved insurance and risk literacy, with many Indian consumers understanding insurance importance only after experiencing financial or health shocks. Closing India's insurance gap will require greater scale accompanied by adequate coverage, stronger consumer trust and risk awareness, while government and private insurers will need to determine how responsibility for India's still-uninsured population is shared. Singh warned that the availability of skilled workers capable of deploying AI across the insurance industry could emerge as another constraint, emphasizing the need for adequate human resources to support technology integration.
