6 ways AI and data analytics are transforming India’s health insurance sector

The health insurance market in India is projected to reach $23.8 billion by 2028. As the country’s digital economy approaches the $1 trillion target, the insurance sector is digitizing rapidly, moving away from traditional sales methods. It is adopting a “phygital” model, blending physical and digital services to enhance customer experience. Key insurance processes, like policy issuance, claim settlement, and pre-medical check-ups, are being digitized, providing clients with a seamless and faster experience. Technologies such as machine learning, artificial intelligence, automation, and data analytics are revolutionizing the industry, transforming operations to better serve customers.

Customised Health Insurance Plans 
Today’s Insurance companies are leveraging technologies like artificial intelligence and data analytics to collect and analyze vast amounts of client data, from medical histories to current ailments and lifestyle habits like food and exercise regimens, data is used to create health insurance plans tailored to each individual’s needs. Customers pay premiums according to their risk profile thanks to personalized risk assessments made possible by AI and data analytics. With customisation now possible, users feel their needs are being met, leading to greater customer satisfaction.

Automation in Claims Processing 
AI has significantly reduced the need for manual labour by digitizing various insurance processes, from claims processing to data entry and evaluation, has been digitalized. This has also minimized manual errors and improved claims handling accuracy. Customers are receiving their refunds faster, making the entire process more efficient and error-free than earlier ones.

Early Fraud Detection
India is facing a surge in digital insurance fraud, with a 212% increase in cases in 2023 compared to the previous year. To combat this, insurance companies are utilizing AI systems to analyze claims data and detect suspicious trends that may indicate fraud. These algorithms learn from historical data, continuously increasing their ability to detect potential fraud and saving insurers money. As per the recent Deloitte Insurance Fraud Report, 40% of insurance organizations prioritize using AI for fraud management. 

AI-Driven Customer Support 
Insurance companies are using AI and data analytics to provide round-the-clock assistance to clients through AI chatbots. Without any human assistance, these chatbots answer frequently asked queries by guiding users through policy details and assisting them with claim submission. Clients can get help immediately whenever needed, making interactions with insurance companies more accessible and convenient, and fostering satisfaction and trust.

Real-Time Monitoring 
AI enables real-time monitoring of claims, ensuring continuous supervision and identifying any questionable data instantly. Rather than relying on recurrent evaluations, this real-time monitoring enables companies to identify abnormal patterns or behaviours as they occur, saving time and money by preventing fraudulent claims.

Health Insights for India 
Through Artificial Intelligence and data analytics, insurers examine vast volumes of health data from the population. AI can easily identify patterns and trends, such as the frequency of particular illnesses or medical disorders within specific demographics or regions. The insurance industry and government use these insights to create solutions addressing common health issues, like chronic illness management policies for diabetes or heart conditions. This strategy aids in developing better products that meet customer needs and enhance overall health outcomes. 

The road ahead
In conclusion, India’s insurance sector will continue to leverage machine learning algorithms, with the system becoming more sophisticated and capable of handling complex datasets. Here, it is important to note that with the increasing usage of AI in the insurance industry, compliance with Indian rules regarding data protection, security, and ethical AI utilization will become more vital. Insurance firms must adhere to laws and regulations formed by regulatory bodies such as India's Insurance Regulatory and Development Authority on AI use and its implementation.

The insurance sector must also consider ethical implications while deploying AI technologies. They must ensure that AI systems are fair, transparent, and impartial. This includes creating strong security standards to protect client data and avoid discrimination. By implementing these advancements responsibly, the insurance industry can position itself as an innovator, offering secure and innovative services that fit the changing needs of policyholders across the country.

Sumeet Aggarwal

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Sumeet Aggarwal is Chief Technology Officer, Manipal Cigna Health Insurance Company, a joint venture between the Manipal Group and U.S.-based Cigna Corporation