Insurance operations are seeing a measurable shift toward automation, with artificial intelligence (AI) now managing a significant share of core workflows.
Policybazaar, an India-based digital insurance marketplace, reported that AI tools are currently responsible for handling 45% of its operational processes, contributing to faster service delivery and improved fraud detection.
AI’s increasing presence in insurance is evident across multiple stages of the customer journey. Chatbots are now resolving over 30% of initial customer inquiries – a twofold increase compared to a year earlier – while AI-based systems are reducing the turnaround time (TAT) for issue resolution by 15%.
AI ticket-tagging capabilities now achieve over 84% accuracy in directing service tickets, factoring in query type, history, and urgency. Real-time sentiment detection allows the system to flag potential complaints or dissatisfaction, giving service teams a chance to intervene earlier in the support cycle.
According to Saurabh Tiwari, Policybazaar’s chief technology officer, AI is helping bridge long-standing service gaps in the industry.
“AI is transforming insurance from a reactive service to a proactive experience. Today, we can anticipate what a customer might need, explain complex products in simple terms, and issue policies in minutes – all without sacrificing accuracy or trust,” he said.
One area where AI’s impact is especially evident is policy issuance. According to data provided by Policybazaar, nearly half of its customers (48%) now receive their policy documentation within 15 minutes – a significant drop from the four-hour average prior to AI integration.
AI tools are also reshaping claims management, particularly through fraud prevention.
Policybazaar reported that roughly 11% of term insurance claims and 16% of savings plan claims are flagged for review based on AI models.
This early identification capability has led to a 14-fold improvement in what the company calls its Early Claims Factor, helping insurers prioritise genuine claims and reduce processing delays.
While operational metrics reflect progress, broader consumer trust in AI technology remains mixed.
A recent GlobalData survey of 5,500 insurance consumers across 11 countries found that over 70% recognised AI’s potential to improve service speed and operational accuracy. However, many respondents also expressed concern about data privacy and the fairness of automated decisions.
Beatriz Benito, lead analyst for insurance at GlobalData, said that while AI holds promise for efficiency, its adoption is constrained by concerns over transparency.
She noted that while AI can reduce administrative burdens and provide around-the-clock service, it will not fully replace the need for human engagement. Clear communication about how AI is used – and where its limits lie – will be key to driving broader adoption in the sector.
