ChatGPT, Web 3, public blockchain will drive innovation in Indian insurance sector: IRDAI chairman Debasish Panda

IRDAI Chairman Debasish Panda said insurance products will see more customization at the individual level going forward

Insurance Regulatory and Development Authority of India (IRDAI) Chairman Debasish Panda said on February 21 that India is moving towards personalized and instant insurance, highlighting the use of modern technologies including ChatGPT, web 3.0 and public blockchain to build such offerings. This underlines the prospects for the innovations of insurtech startups.

This comes at a time when insurtech startups are seeing increasing interest from venture capital firms. Recently, InsuranceDekho raised $150 million in a Series A round of funding, insurtech unicorn Acko is also in the process of raising around $100 million in an upcoming round and Digit is on its way to an IPO.

Speaking at the Indian Venture and Alternate Capital Association (IVCA) Conclave 2023, Panda said that according to the latest global fintech adoption index, India’s leading fintech has an adoption rate of 87 percent, which is significantly higher than the world average.

“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,” he said.

He added, “The world is also becoming more and more digital with India being a pioneer in technology and digital. India stack, UPI, aadhar and the account aggregator are all a base for financial services. What used to take days is now done in seconds.”

Web 3.0 will soon be a reality and India has a lot to offer there, he said.

Public blockchain will further enable smart insurance contracts to include all details in the ledger which will be programmed to monitor live data and react accordingly, triggering an immediate payout in real time.

Personal insurance

Panda said: “For insurance, times are changing. We will venture into the world of continuous underwriting and seamless underwriting.”

He explained, for example, that drivers will see how insurance costs fluctuate – depending on the route they travel, the condition of the roads, etc.

The way conventional insurance has been offered will also be changed, and as a result of this highly tailored insurance, companies will be able to quickly handle massive data sets from multiple sources using quantum computers, revolutionizing risk modeling and decision-making, he said.

Panda said: “We are all moving towards the program the world says ‘Planet personalized’. Young millennials and Gen Z want everything at the touch of a button, and it needs to be flexible, both in terms of what is covered and how they pay. They are looking for products that they can adapt to their specific needs.”

“Change is also coming from a very non-millennial cohort. The elderly are living longer and expect more from their time. And that entails a new financial and caring challenge. There is a need to create more flexible pension schemes.”

According to Panda, most policyholders today want a “do-it-yourself” or self-service approach to finding the best personal options available to them. This has led to the emergence of various advisory technologies and technical tools such as digital assistants.

Investments in startups

IRDAI had also extended its regulatory sandbox timeline to 36 months to help players and financial services start-ups continue to experiment with newer innovations and unique insurance solutions.

Panda talked about facilitating institutional funding that will also benefit startups. Insurance companies can now also invest in AIFs and funds of funds, and gain exposure to non-listed entities.