India’s insurance sector is turning to blockchain technology to drive innovation

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

“ChatGPT, one of the classic disruptions, the popular AI chatbot, has amassed over 100 million users in just about two months and is already changing the way the world works,” said Panda. “Times are changing for insurance companies. We will venture into the world of continuous underwriting and seamless insurance.”

Using distributed ledgers, Panda explained that drivers would see real-time insurance cost fluctuations based on road conditions and routes. The use of smart contracts will allow users to receive withdrawals automatically, without the typical bureaucratic processes that plague sectors.

Panda noted that the far-reaching changes follow increased interest from global venture capital (VC) firms. In early February, Indian firm InsuranceDekho raised $150 million in a Series A funding round led by Goldman Sachs Asset Management and TVS Capital, with a similar increase in work for Acto.

Other changes expected by stakeholders in the Indian payments space include the ability of companies to process huge data sets using quantum computing and artificial intelligence. Panda added that in the future, India’s policyholders will be able to use self-service options when interacting with local insurance companies.

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“We are all moving towards the program that the world is calling ‘Planet Personalized.’ Young millennials and Gen Z want one-stop shopping, and it needs to be flexible, both in terms of coverage and how you pay,” Panda said.

Increasing blockchain adoption in India

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

The adoption rates align with Finance Minister Nirmala Sitharaman’s comments that the country is targeting a 46% blockchain adoption rate in the coming years. DLT has already made inroads into multiple facets of the Indian economy including finance, security, healthcare and housing.

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