India’s insurance sector is looking at blockchain technology to drive innovation
India is pinning its hopes on blockchain technology to be a game-changer for its insurance sector as it grapples with modern realities.
The country’s Insurance Regulatory and Development Authority of India (IRDAI) confirmed that it would explore using blockchain and Web3 technologies to improve the insurance sector. IRDAI Chairman Debasish Panda revealed to reporters at the Indian Venture and Alternate Capital Association (IVCA) Conclave 2023 that the sector will be keen to take part in the global digitization wave.
“ChatGPT, which is one of the classic disruptors, the popular AI chatbot amassed over 100 million users in about two months and is already changing the way the world works,” Panda said. “For insurance, times are changing. We will enter the world of continuous underwriting and seamless underwriting.”
By using distributed ledgers, Panda stated that drivers would see the fluctuations in insurance costs based on road conditions and routes in real time. The use of smart contracts will allow users to receive payments automatically without the typical bureaucratic processes that plague the sectors.
Panda noted that the sweeping changes come on the heels of increased interest from global venture capital (VC) firms. In early February, India’s InsuranceDekho raised $150 million in a Series A funding round led by Goldman Sachs Asset Management and TVS Capital, with a similar raise in the works for Acto.
Other changes expected by stakeholders in India’s payments space include the ability of firms to process massive data sets with quantum computers and artificial intelligence. Panda added that in the future, India’s policyholders will be able to use self-service options in interaction with local insurers.
“We are all moving towards the program the world says is ‘Planet personalized.’ Young millennials and Gen Z want everything in print, and it needs to be flexible, both in terms of what is covered and how they pay,” said Panda.
Increasing blockchain adoption for India
India’s blockchain adoption rates are nothing short of impressive as they outpace those of its neighbors and continue to lead the world in distributed ledgers. Several programs have been organized to introduce blockchain as part of the curriculum of students in the country, the latest being the National Institution for Transforming India (NITI) Aayog’s learning module with 5ire.
The adoption rates are consistent with Finance Minister Nirmala Sitharaman’s comments that the country is aiming for a blockchain adoption rate of 46% in the coming years. Already, DLT has made its debut in several facets of India’s economy, including finance, security, health and housing.
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