- Use Cases of AI
- Benefits Offered
- Challenges in Adoption
Himanshu is a content marketer with 2 years of experience in the life insurance sector. His motto is to make life insurance topics simple and easy to understand yet one level deeper for our readers.
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Anchita has over 6 years of experience in content marketing, insurance, and healthcare sectors. Her motto to make health and term insurance simple for our readers has proven to make insurance lingos simple and easy to understand by our readers.
Updated on Jun 16, 2025 6 min read
What is Artificial Intelligence in Life Insurance?
Artificial Intelligence (AI) in life insurance refers to using AI-powered tools by life insurance companies to enhance efficiency, reduce manual tasks, and offer a better customer experience. The use of AI technologies by life insurance companies to automate manual tasks is increasing rapidly. This rapid increase in the use of AI in the insurance sector has simplified various processes involved, including risk assessment, policy recommendation, fraud detection, and compliance checks.
Various life insurance companies are using AI-powered technologies to streamline their various tasks. Tata AIA Life Insurance is using it for offering product recommendations, Shriram Life Insurance is using it for claim management, and Aegon Life for identifying age, gender, and well-being through facial recognition.
What is the Application of Artificial Intelligence in Life Insurance?
The application of artificial intelligence in the life insurance industry is expanding rapidly for automating and improving various processes. Let’s understand the application and role of AI technologies in the life insurance sector for both the insurance companies and customers.
Application of AI for Life Insurance Companies
Personalise Customer Support
AI chatbots and agents offer personalised support to address customer queries. They can offer relevant and accurate information to customer queries, providing customers with basic information that does not require human interaction. Moreover, AI agents can handle multiple customer queries at a time.Providing AI-based Insurance Recommendations
Using AI in life insurance provides product recommendations based on customers’ needs, financial goals, and requirements. Using AI for offering life insurance recommendations maximises the customer satisfaction rate.Automating the Underwriting Process
Underwriting is one of the most important processes for any insurance company. The use of AI algorithms and LLM models helps life insurance companies to assess and calculate the risks involved with each insurance policy.Improving Marketing and Ad Campaigns
AI is helping insurance companies improve their marketing processes by identifying and targeting the right audience to maximise the ROI. It helps to analyse large customer data and assess customer preferences.Fraud Detection
According to Deloitte’s Insurance Fraud Survey 2023, approximately 1 to 3% of insurance claims are accounted for by misrepresentation or potential fraud. AI models help insurance companies detect potential fraud claims and transactions by using advanced technologies.
Application of AI for Customers
Comparing Different Life Insurance Plans
AI-powered technologies help customers compare various life insurance products based on different parameters, including policy tenure, premium payment tenure, sum assured, etc. You can choose the insurance plan that best aligns with your requirements.Understanding Policy Documents
There are various terms used by life insurance companies in their policy documents, such as free-look period, grace period, premium holiday, etc, which are difficult for customers to understand. AI helps to understand these terms in a simpler way.Providing Tailored Insurance Solutions
Every individual has different requirements and future goals. AI-powered tools understand your requirements and recommend life insurance plans that align with your goals and future requirements.Provides Assistance in the Claim Settlement Process
AI-powered platforms streamline the claim settlement process for the customers. If customers face any queries or questions during the claim process, they can get them addressed with the help of AI.Financial Literacy
The most common reason for low insurance penetration in India is a lack of financial literacy among people. AI-based platforms educate people regarding life insurance products through articles, blogs, videos, etc.
Benefits of AI in Life Insurance
The use case of AI in the life insurance sector offers a range of benefits to the insurance companies. Let’s understand these benefits in detail.
Cost Reduction
The usage of AI tools and technologies helps to reduce the overall cost in terms of customer support, marketing, operations, underwriting, etc.Automate Manual Tasks
The insurance companies can automate most of their daily tasks by adopting AI-powered tools. For example, AI chatbots are gradually taking up customer support, reducing the need for customer support agents.Policy Servicing
Artificial intelligence helps life insurance companies in servicing existing policies, such as sending policy updates, renewal reminders, and other reminders.Predictive Analysis
Data plays an important role for life insurance companies. Artificial intelligence helps life insurance companies in predictive analysis that can help them make various important decisions, such as developing customer retention strategies, analysing customer behaviour, etc.Improving Efficiency and Reducing Manual Errors
By leveraging AI-powered technologies, the efficiency of the processes is enhanced, whereas the frequency of manual errors is reduced.
How Different Life Insurance Companies Are Using Artificial Intelligence?
Different life insurance companies are adopting artificial intelligence for different purposes.
Bajaj Allianz Life Insurance
Bajaj Allianz Life Insurance has built an AI-based model for fraud detection. The system analyses the data of the customers, including their demographics, financial condition, education qualifications, etc, to detect fraud patterns. It helps life insurance companies to make better decisions.Bharti Axa Life Insurance
Bharti Axa Life Insurance uses AI for multiple functions, such as providing customer support, offering personalised recommendations, fraud detection, risk analysis, etc.ICICI Prudential Life Insurance
ICICI Prudential Life Insurance has started using the chatbot LiGo by IBM, which offers advanced analytics that can be used by the company to enhance the overall customer experience and engagement.Tata AIA Life Insurance
Tata AIA Life Insurance has been constantly upgrading them with the new age AI technologies to streamline operations and enhance customer experience. Two of their pivotal innovations include a GenAI-powered chatbot- Tasha and a 3-step process for insurance purchase.HDFC Life Insurance
HDFC Life Insurance- one of the leading life insurance companies has been leveraging AI to automate its various tasks. They are using various AI-powered applications, including FaceSense for facial
recognition, RPA bots for underwriting, Generative AI for marketing campaigns, etc.
Challenges of Adopting AI in Life Insurance
The complete adoption of AI technologies in the life insurance sector can pose various challenges. Let’s understand the challenges faced by the life insurance sector in the adoption of AI.
Data Privacy Concerns
One of the biggest challenges faced by life insurance companies in the adoption of AI technologies is data safety concerns. The insurance companies have a vast amount of customer data. So there is a need for strict security measures to ensure your data is not compromised.Skill Gap Among the Workforce
To adopt artificial intelligence, the life insurance companies require a skilled workforce that knows how to use AI to streamline processes. The lack of availability of a skilled workforce is another big challenge in AI adoption.High Upfront Costs
The upfront cost of implementing artificial intelligence is high, which is one of the barriers to adoption. While the insurance companies reap the benefits over a certain period, the initial cost can be a barrier for small players.Compliance Management
The life insurance companies have to fulfil several compliances and regulatory frameworks to protect the interests of policyholders. Adopting AI and fulfilling these compliances at the same time can be a hectic task for insurance companies.Ethical Concerns
The responses offered by AI are generally based on historical data, and the biases in the data can result in biased decision-making. These ethical concerns are a major challenge for life insurance companies.
Conclusion
The use of artificial intelligence is truly a game-changer for life insurance companies as it helps to reduce costs, automate tasks, and improve overall efficiency. However, various challenges come along the way that need to be addressed to ensure everything works smoothly. By solving these hindrances, the life insurance industry in India can offer tailored insurance solutions that safeguard the financial future of Indians.
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FAQs: AI in Life Insurance
1. How AI is reshaping the future of life insurance in 2025?
AI is reshaping the future of life insurance in 2025 with advanced data analytics, personalised insurance recommendations, advanced fraud detection, etc.
2. How can AI help insurance claims?
AI helps insurance companies in faster claim processing with advanced techniques for verifying claim legitimacy.
3. What is the role of artificial intelligence in the insurance industry of India?
Artificial intelligence plays a major role in the insurance industry of India in the automation of various processes, including underwriting, claim processing, product recommendation, etc.
4. What is the future of insurance in India?
The future of insurance is very bright in India, as more people will adopt life insurance policies due to increasing financial literacy and per capita income.
5. Is AI replacing human agents in the life insurance sector?
No, AI will not replace agents in the life insurance sector, but it will set new standards for efficiency, personalisation, and security.
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Written By: Himanshu Kumar
Himanshu is a seasoned content writer specializing in keeping readers engaged with the insurance industry, term and life insurance developments, etc. With an experience of 2 years in insurance and HR tech, Himanshu simplifies the insurance information and it is completely visible in his content pieces. He believes in making the content understandable to any common man.
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