AI changing the insurance landscape: Our Chief Strategy Officer speaks exclusively with ET Now

Insurance, a hitherto human resource-intensive industry is undergoing an interesting transformation thanks to artificial intelligence. Through AI, insurers can now effortlessly use an algorithm to draw up a profile sketch of a customer by scanning credentials like Aadhaar, PAN, and phone number and even get the customer's consent for KYC and another verification purpose, said Aegon Life Insurance.

“Artificial intelligence is having an inevitable impact on the way we do insurance business. Insurance has traditionally been an industry that requires several documents for KYC, income, and health verification purposes. It has been a human-intensive industry; however, AI is changing the entire landscape. We can get PAN, Aadhaar, and phone number and also the consent of the customer to process the information,” said Srinidhi Rao, Chief Strategy Officer of Aegon Life Insurance.

"With AI we can get basic credentials like Aadhaar, PAN, and phone number. Also, we can get the consent of the customer and go to a lot of government websites like CKYC, Aadhaar Stack, health stack and account aggregator and formulate a picture of you without any documents and use that to do the traditional underwriting decisions using an algorithm rather than a person. Hence, customers will not have to wait for a month to figure out whether they will get the insurance policy or not and insurance companies can reject or give the policy to the customers within a short time," he added.

Other than KYC, AI is also being increasingly deployed in actuarial calculations, which are used for determining premiums.

Asked whether the AI-determined premiums are beneficial more for customers or the company, Rao replied that it is the customer that benefits because a lot of time and expense is saved through AI, and the benefits of it can be transferred to the customers.

On the question of tackling forged documents, Rao said that in the case of physical copies, there are chances of documents like bank account statements being forged. However, through AI we are getting it from the account aggregator, resulting in no forgery.

"We are using AI to check the identity through phone number and PAN or Aadhaar card for determining the identity and an account aggregator for getting the bank account statement," he added.