Few industries in India have adapted faster. Online issuance. Video KYC. Tele-medicals. Apps in a dozen languages. Analytics on claims. Whatever arrived, life insurance tried it. Most of it stuck. 97.82 per cent of death claims paid is the result. It deserves to be said plainly.

The same effort has left four problems on the table. More of the same will not clear them.

Problem one. The insurer does not know its own risk quality.

₹958 crore of claims were refused last year under Section 45 of the Insurance Act. The law permits that on one basis only: a fact material to the risk was misstated or suppressed in the proposal. Every one of those facts was asked on the disclosure call. Every one was answered. Did the call catch everything? ₹958 crore says no. Even that figure is not a count. It is a ceiling. A fact enters it only if it surfaced within three years. Only if it was found inside forty-five days. Only if the insurer would take the dent in its ratio. What cleared none of the three has no row in any report. The real number is unknown. Every insurer is pricing a book on a floor it cannot see.

Problem two. The metric the market rewards pulls against the one the balance sheet needs.

Every distributor quotes the claims ratio. Every repudiation lowers it. The balance sheet needs the opposite: every policy priced on the risk actually written. The ratio and the risk quality are not the same thing. The industry has been asked to maximise the first.

Problem three. The business happens on voice. The risk is assessed on text.

After three years the law allows no question. Everything the insurer will ever know about the risk, it learns at the point of sale. The point of sale is a conversation. The sales call. The tele-medical. The verification call. Each one is recorded, transcribed within the hour, and read as text. The insurer’s entire view of the risk is what the applicant said, typed out, with the conversation removed.

Problem four. The tools that reached 97.82 cannot reach the next customer.

The regulator’s goal is insurance for all by 2047. That customer has no salary slip. No lab within reach. No English on the declaration. Every known way to tighten underwriting asks for more of what that customer cannot give. Tighten, and the market shrinks. Loosen, and the ceiling rises.

So the question is not whether the industry has tried hard enough. It has tried everything. The question is whether the same methods can reach a different goal. If risk is still read from a form and a transcript, how does the book get larger and cleaner at once?

Risk assessment can be better in two ways. Inclusive. Cognitive.

Inclusive, because the one input every applicant can give is a conversation. Any language. No literacy. No document, no lab, no address proof. Twenty minutes on a phone from anywhere with a signal. The industry already collects it from every applicant.

Cognitive, because a risk decision today is a lookup: does the form match the rules. Cognition is reading how an answer was given, not only what it contained. The pause before a reply. The steadiness of the pitch. How one question sat against the rest. The words are composed. The voice is not. The transcript keeps what the applicant decided to disclose. The voice keeps how the applicant met the question.

That is not a new source of data. It is the fifth one, in a file the industry has kept all along, read as itself for the first time.

The business already happens on voice. What would underwriting look like if it listened?

Sources

  1. Claims figures: IRDAI Annual Report 2024–25, Table I.11, Death Claims of Life Insurers, page 18. Individual business. Note 2 to the table: "Claims repudiated are claims that cannot be considered as per the provisions of section 45 of Insurance Act, 1938." irdai.gov.in (Annual Reports). Mirror.
  2. Three years, and the grounds for repudiation: Insurance Act, 1938, Section 45, as substituted by the Insurance Laws (Amendment) Act, 2015. Sub-section (1): no policy may be called in question on any ground after three years. Sub-sections (2) and (4): within three years, only on the ground of fraud, or of a misstatement or suppression of a fact material to the expectancy of the life of the insured in the proposal. indiacode.nic.in
  3. Forty-five days: IRDAI Master Circular on Protection of Policyholders’ Interests, 5 September 2024. Death claims requiring investigation to be settled within 45 days; claims not requiring investigation within 15 days. irdai.gov.in (Circulars)
  4. Insurance for All by 2047: IRDAI press release, 6 May 2022, and the 120th meeting of the Authority, 25 November 2022. irdai.gov.in (Press Releases)