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FM asked PSU insurers to leverage AI for improved risk assessment
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....M asked PSU insurers to leverage AI for improved risk assessment<BR>PTI News<BR>Dated:- 28-5-2025<BR>PTI<BR>New Delhi, May 28 (PTI) Finance Minister Nirmala Sitharaman on Wednesday reviewed financial performance of public sector general insurance companies and asked them to leverage artificial intelligence (AI) for improved risk assessment as well as prompt address of customer grievances. During....
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.... the review, the Finance Minister emphasised the urgent need for digital transformation across all public sector general insurance companies (PSGICs) to improve service delivery and efficiency, the finance ministry said in a statement. This includes the adoption of AI-driven claim settlement systems, particularly for Motor Own Damage and Health insurance products, to ensure faster and more accur....
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....ate claim resolution. Sitharaman also directed the companies to develop innovative insurance products tailored to new and emerging risks, including cyber fraud, and to diversify their product portfolio in line with evolving consumer needs. The importance of robust underwriting practices and portfolio optimisation was also highlighted, with instructions to align combined ratios with global indu....
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....stry benchmarks to safeguard profitability and financial stability. Customer-centricity was identified as a core focus area and the minister urged PSGICs to promptly address customer grievances, strengthen social media engagement, and ensure seamless integration with the Account Aggregator system, including end-to-end digital Know Your Customer (KYC) processes. These measures are designed to s....
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....implify onboarding and improve the customer experience. To expand market reach and strengthen service accessibility, PSGICs were encouraged to pursue strategic collaborations with intermediaries, fintechs, and insurtech firms, it said. Stressing on the importance of leveraging advanced data analytics and artificial intelligence, she said, these can help develop precise pricing models and effic....
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....ient claims modelling, which are essential for improved risk assessment and long-term sustainability. The Finance Minister asked PSGICs to implement these directions in a time-bound manner and instructed that regular reviews should be conducted to monitor progress and ensure the achievement of intended outcomes, it said. During the meeting, which was attended by senior officials of the Departm....
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....ent of Financial Services and CEOs of PSGICs, the Finance Minister reviewed key performance indicators including premium collections, insurance penetration and density, and incurred claims ratios. It was noted that the total premium collected by PSGICs has witnessed a notable rise from around Rs 80,000 crore in 2019 to nearly Rs 1.06 lakh crore in 2025. The overall general insurance industry als....
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....o reported growth, with total premium collections reaching Rs 3.07 lakh crore in FY 2024-25. While general insurance penetration in India remains relatively low at 1 per cent of GDP -- compared to a global average of 4.2 per cent in 2023 -- insurance density has steadily improved. The Finance Minister underscored the need for PSGICs to work towards improving both penetration and density to ens....
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....ure wider financial protection during the meeting. Officials led by DFS Secretary M Nagaraju also presented a five-year analysis of the health insurance segment, showing consistent premium growth across Private Insurers, Standalone Health Insurers (SAHI), and PSGICs. Incurred claims ratios, which had peaked during the COVID-19 pandemic in FY21 (PSGICs at 126 per cent and private insurers at 10....
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....5 per cent), have since declined. By FY24, these ratios had moderated to 103 per cent for PSGICs, 89 per cent for private insurers, and 65 per cent for SAHI. The PSGICs have witnessed a significant turnaround with all of them having become profitable again. While Oriental Insurance Company Ltd (OICL) and National Insurance Company Ltd (NICL) started posting quarterly profits from Q4 of FY24 an....
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....d Q2 of FY25, respectively, United India Insurance Company Ltd. (UIICL) posted profit in Q3 of FY25 after a gap of 7 years, it said. Notably, New India Assurance Company Ltd. (NIACL) has consistently maintained its position as a market leader and has been making profits regularly, it said. Managing Directors General Insurance Corporation of India (Reinsurance) and Agriculture Insurance Company....
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.... of India Ltd were also present. PTI DP DRR<BR> News - Press release - PIB....