How Indian insurers can move beyond claims to continuous protection

The future of insurance in India lies in reimagining insurance as a continuous protection ecosystem built around prevention, prediction, protection and recovery.

Co-authored by:

Shruti Agarwal Ladwa, Partner and Leader, Insurance Sector, EY India.

In brief

• Insurance must evolve from episodic claims interactions to continuous protection, prevention and recovery support.
• AI, Digital Public Infrastructure and data can enable simpler, more personalized and trusted insurance experiences.
• Building trust requires greater transparency, relevance, accessibility and support across the customer journey.

India’s insurance industry has achieved significant scale. However, the future of insurance in India will be defined by its ability to close the insurance protection gap in India and create meaningful financial resilience for customers. Achieving the Indian government’s vision of “Insurance for All by 2047” requires a shift beyond policy issuance and premium growth towards delivering relevant, accessible and responsive protection across every stage of a customer's life, highlights the EY report, ‘From claims to continuous protection: Reimagining urban and rural insurance.’ 

Understanding the insurance protection gap in India

India has emerged as the world's tenth-largest insurance market, generating approximately INR11.9 lakh crore in premium income in FY25. Yet despite sustained premium growth, insurance penetration has remained largely unchanged over the past decade, highlighting a persistent insurance coverage gap in India and a broader insurance protection gap in India. Rising premium volumes have not necessarily translated into deeper protection for households, businesses and communities. 

Addressing the insurance protection gap in India requires understanding an important distinction. The insurance reach gap measures how many people are insured, while the insurance coverage gap in India reflects how much of an individual's or business's financial loss would actually be covered in the event of a claim. For millions of Indians, having insurance does not always mean having adequate protection.

The report highlights two distinct realities shaping the future of insurance in India. Urban India is increasingly facing a protection adequacy challenge driven by rising healthcare costs, digital lifestyles, cyber risks and climate-related disruptions. Rural Bharat, meanwhile, continues to face an access challenge where affordability, servicing, distribution and claims fulfilment remain barriers to adoption. Closing both the insurance protection gap in India and the insurance coverage gap in India will require differentiated strategies tailored to the realities of urban and rural customers.

Why continuous protection is the future of insurance in India

Traditional insurance models were built around episodic interactions and claims settlement. However, customer expectations and risk environments are evolving rapidly. Protection needs are becoming more dynamic, risks are becoming interconnected, and customers increasingly expect solutions that adapt along with changing lifestyles, income patterns and economic realities.

The future of insurance in India, therefore, lies in moving from claims-led insurance to continuous protection. Rather than responding only after a loss occurs, insurers may increasingly need to create ongoing engagement models that support prevention, resilience and recovery. This shift is critical to achieving Insurance for All by 2047, as it allows protection to become more relevant, personalized and embedded into everyday life.

A continuous protection model is built around three principles:

• Personalized protection aligned to a customer's unique needs and risk profile.
• Modular protection that allows customers to select the coverages most relevant to them.
• Adaptive protection that evolves with changing life stages, responsibilities and risk exposures.

These shifts can help insurers narrow the insurance coverage gap in India while significantly improving protection adequacy and trust.

How AI in insurance is reshaping underwriting and risk assessment

The growing adoption of AI in insurance is creating new opportunities to address long-standing structural challenges. The report highlights that AI in insurance, when combined with Digital Public Infrastructure (DPI), alternative data and ecosystem partnerships, can help insurers improve risk visibility and expand insurability across customer segments.

For urban customers and MSMEs, AI in insurance can support more accurate underwriting by leveraging alternative data sources and behavioral signals. Traditional underwriting models often struggle when financial histories are incomplete or fragmented. AI-enabled approaches can create a more granular understanding of business resilience, operational performance and customer risk exposure.

By combining consented data, verified identity, digital records and geospatial information, AI can transform fragmented information into actionable risk intelligence. This can improve underwriting, expand affordability and help reduce the insurance protection gap in India among underserved populations.

The report also emphasizes that AI in insurance should not function as a standalone capability. It must work along with trusted infrastructure, governance frameworks and customer consent mechanisms to deliver fairer, more relevant and more accessible protection outcomes.

The rise of AI-powered insurance claims

The report identifies AI-powered insurance claims as a key enabler of the next generation of protection. Based on autonomous decision-making, real-time verification and streamlined settlement journeys, AI-powered insurance claims can improve recovery outcomes while reducing customer effort.

The future of AI-powered insurance claims is not simply automation for its own sake. High-frequency and low-complexity claims may become increasingly autonomous, while health and life insurance claims continue to combine AI-led decision-making with human support during critical moments. This balanced approach can improve both efficiency and customer experience.

Insurance for All by 2047: Building a connected protection ecosystem

As insurers focus on reducing the insurance protection gap in India, addressing the insurance coverage gap in India and enhancing customer outcomes, the industry can create a globally relevant model for inclusive protection. The future of insurance in India is therefore not defined by new products alone, but by the creation of an ecosystem that continuously supports people, livelihoods and enterprises. Through coordinated action and sustained innovation, the ambition of Insurance for All by 2047 can move from aspiration to reality