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AI To Transform Auto Insurance In India

AI To Transform Auto Insurance In India

Insurance in India is penetrating at 3.7% of the Gross Domestic Product (GDP) as against the world average of 6.3%. Where life insurance is growing at 11 – 12%, general insurance is growing at 18% per annum in India. As the market for automobiles increases, the insurance market for automotive is also increasing. Though there is a massive market for auto insurance, the challenges in India for auto insurance renewals are still challenging, enforcing a greater need for improvements in the process. 

The challenges like renewals, retention and claim settle in auto insurance exist for a long time now. However, the emergence of technologies like artificial intelligence and machine learning are being applied to solve and simplify these processes. As a matter of fact, some of the insurance giants like ICICI and Reliance in collaboration with Microsoft have started introducing AI-based apps for auto insurance activities like the new policy, renewals as well as vehicle inspection. The apps make buying and renewing policies easy for the customers, anywhere. And soon the app will also be able to simplify the process for users to make a repair claim.


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In the case of lapsed policy instead of a physical inspection, customers can now simply take images of their vehicle and upload them with Insure. The app then uses AI and ML to divide the images into frames, which would allow it to evaluate the various parts of the vehicle to identify the damages. 

Such an advancement would allow the AI module to make a judgement of the damages on the car/vehicle very quickly, which, in turn, reduces the processing time from days to mere minutes. The system leverages the Azure platform, along with computer vision and machine learning technologies, which makes the process accurate making it right for such purposes. Launched in December of 2018, the system worked fine with the customers, where the real-time renewal of expired policies makes the customer experience consistent and convenient. 

The Tech Behind:

  • Post-filling policy details click on the self-inspection button on the Insure app.
  • Capture the vehicle photographs and upload at the numbered areas.
  • After uploading the images, the cloud-based AI module analyses each photo, and post that provides a confirmation immediately.
  • Once the AI module confirms the damages on the car/vehicle, under the guidelines, the policy is then processed for issuance. Alternatively, the vehicle is recommended to technical experts, who review the damages and decide on the proposal.

The Next Challenge:

Though most of the challenges are being figured out and resolved, one of the critical aspects of auto-insurance is claim settlement. Claim settlement post-accident is a crucial part of auto insurance — not only can it be very subjective and biased at the same time but can also have a great deal of false claims. 

The implementation of an AI-based system which can help in finding a robust solution was imperative. Therefore, in recent news, it has been learnt that the South Korean government has been working on introducing such AI-based car insurance services by the coming year. The purpose of having such an advanced system is to calculate the cost of the repair automatically, which would also analyse the amount of damage on the vehicle as well as the required repair parts based. All these judgements are done on the basis of the pictures uploaded of the damaged vehicle. 

This system is a combination of AI, and the Automobile repair cost On-line Service (AOS) currently in use by insurers and auto repair shops. Specifically, the pictures are transmitted to the AOS server of the Korea Insurance Development Institute, the AOS analyses the pictures and automatically calculates repair costs, and then the data is transferred to an insurer, an auto repair shop and the owner of the vehicle.

The owner can immediately receive the repair cost data in the event of an accident. On the insurer’s part, more accurate claims adjustment is anticipated, and its work can be expedited as no on-site process is required. The AOS is capable of identifying duplicate pictures, and thus double insurance claims can be prevented. Quicker repair cost claims are possible for repair shops, too.

“The AOS analysed one million pictures of damaged cover panels from April 2019 to April this year to record a matching rate of 70% to 80% for those cases with a repair cost of less than 900,000 won,” the Korea Insurance Development Institute explained. He further added, “The AOS is equipped with algorithms applicable to 170 models of sedans, SUVs and so on and is capable of covering 90% of all vehicles.”

The Future:

With this kind of AI-based insurance service, in future, most of the critical processes of the services can be made interactive and straightforward. The agenda of introducing technologies like ML, CV and sensors is to automate and make complex processes simple, interactive and as accurate as possible. 

Although these introductions of new technologies improve the processes in terms of customer acquisition, retention and interaction, it indeed comes with a particular set of challenges. 

To name a few — How far do these emerging technologies sustain in auto insurance in India and bring robust systems? What will be the future of auto-insurance in India with the introduction of AI-based services? Will it be able to increase the market share of the companies spending huge on these technologies? How do the customers respond to the non-human based services in auto-insurance? Will these systems reduce frauds and false claims? These are some of the critical questions which one need to discuss before implementation.

The article has been co-authored by Dr. Samala Nagaraj and Dr. Raul V. Rodriguez

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Dr. Raul V. Rodriguez
Dean at Woxsen School of Business. He is a registered expert in Artificial intelligence, Intelligent Systems, Multi-agent Systems at the European Commission, and has been nominated for the Forbes 30 Under 30 Europe 2020 list.

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