India’s insurance sector eyes blockchain tech to drive innovation

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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 it would explore using blockchain and Web3 technologies to improve its insurance sector. IRDAI Chairman Debasish Panda disclosed to reporters at the Indian Venture and Alternate Capital Association (IVCA) Conclave 2023 that the sector will be keen on tapping into the global wave of digitization.

“ChatGPT, which is one of the classic disruptions, the popular AI chatbot amassed over 100 million users in just about two months, and it’s already changing the way the world functions,” said Panda. “For insurance, times are changing. We will be venturing into the world of continuous underwriting and seamless insurance.”

Using distributed ledgers, Panda stated that drivers would see the fluctuations in insurance costs based on the roads’ state and routes in real time. The use of smart contracts will allow users to receive payouts automatically without the typical bureaucratic processes plaguing the sectors.

Panda noted that the sweeping changes are coming on the heels of heightened 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 anticipated by stakeholders in India’s payment space include firms’ ability to process massive data sets with quantum computers and artificial intelligence. Panda added that in the future, India’s insurance policyholders will be able to utilize self-service options in interacting with local insurance firms.

“We are all moving towards the program the world says ‘Planet personalized.’ Young millennials and Gen Z want everything on a tap, and it has to be flexible, both in terms of what is covered and how they pay,” said Panda.

Surging blockchain adoption for India

India’s blockchain adoption rates are nothing short of impressive as it surpasses the rates of its neighbors, going on to be a world leader in distributed ledgers. Multiple programs have been organized to introduce blockchain as part of the learning curriculum of students in the country, the most recent being the National Institution for Transforming India (NITI) Aayog’s learning module with 5ire.

The adoption rates align with Finance Minister Nirmala Sitharaman’s comments that the country is targeting 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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