A few years ago, buying an insurance policy online might have felt like pulling teeth with long processing times, unresponsive support systems, and paperwork that seemed tough to process digitally. But if you have tried buying or renewing your insurance policy recently, there is a good chance the experience was noticeably faster, simpler, and more intuitive.
One big reason? Artificial Intelligence is now quietly powering nearly half of the backend processes, and the difference is showing.
A new data report from Policybazaar, an online insurance marketplace, outlines how much has changed when it comes to AI integration with insurance services.
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A 15-Minute Policy Turnaround Is Now Real
One of the most significant shifts has been in policy issuance timelines. For nearly 48 per cent of customers, insurance policies are now issued within just 15 minutes, a massive drop from the four hours it used to take. Just two months earlier, less than 2 per cent of customers experienced such fast service. The impact here goes beyond convenience, it is helping reduce drop-offs and delays that often discouraged people from completing the purchase at all.
What's Changed Behind the Scenes
Much of the customer-facing experience is also being reshaped quietly. Around 30 per cent of first-contact insurance queries are now handled by AI chatbots. These are not the clunky bots we used to deal with, they are now able to respond in plain language, even in multiple Indian languages for people who choose it, and offer accurate answers or redirect to the right person when needed.
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In fact, AI now helps route customer service tickets to the correct teams with over 84 per cent accuracy. That might sound technical, but it is what's behind the 15 per cent drop in resolution turnaround time and a customer satisfaction score now above 94 per cent, both decent indicators that things are working better than they were.
Claims, Fraud Checks, and Early Intervention
The real test of insurance, of course, is the claims process and that is also seeing change. AI systems are now able to flag potentially fraudulent claims early, which has led to a 14x improvement in the Early Claims Factor since 2022. In simpler terms, the system is faster at weeding out suspicious claims, so genuine ones get processed sooner.
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For term insurance, about 11 per cent of claims get flagged for further checks, and it is a bit higher for savings-linked products, around 16 per cent. The goal is not to delay payouts but to sort things more efficiently so that valid claims don't get stuck in long queues.
AI is also being used to send over 500,000 personalised nudges every day from small reminders that are better timed and actually relevant.
You might get a message around tax season if your policy is due. Or a recommendation if you have recently searched for parenting content. These prompts, customised by age, location, and even your digital behaviour, are leading to better engagement, as per the report.
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Reaching the Rest of India
Another quiet win here is accessibility. With AI-powered support now working in nine Indian languages and voice-to-text tools in place, the experience is improving for users who are not fluent in English or comfortable typing. This is also helping more people in Tier 2 and 3 cities, places where insurance adoption has typically lagged, to navigate insurance products with more confidence.
However, the shift is not complete, and AI does not solve everything. But the overall direction is clear: the systems that once made insurance feel complex and slow are starting to feel more responsive, more local, and most importantly, faster.
Not everything about insurance has changed. But thanks to AI doing its job in the background, more people are getting covered without the long wait, the confusing paperwork, or the nagging feeling that it is all too complicated.
