A shortage of trained insurance professionals is pushing insurers to automate claims processing, underwriting and customer onboarding, insurers and industry experts told ET.
The shift marks a departure from the popular narrative around artificial intelligence replacing jobs even as it enables insurers to handle growing business volumes without matching increases in hiring.
“While the talent pool remains large, insurers are finding it harder to source candidates who can quickly adapt to process complexity, compliance requirements and tech-enabled workflows,” said Balasubramanian A, senior vice president at staffing firm TeamLease Services.
As a result, companies are increasingly adopting AI and automation across core insurance functions.
Automation is being used to manage higher volumes with better accuracy rather than replace existing roles, Balasubramanian said.
Debashish Banerjee, partner at professional services major Deloitte India, said new technologies are helping insurers automate claims notes, medical history, and doctors’ and hospitals’ paperwork. “On the underwriting side, customer onboarding, KYC, policy renewals and medical tests are increasingly becoming digitised and AI-driven,” he added.
Simple and low-value claims globally already see 60-80% straight-through processing (STP) with India “not very far behind global peers,” Banerjee said. “These are real adoptions and not just on papers,” he added.
The gains are increasingly visible in productivity.
According to Deloitte, GenAI-led interventions are delivering productivity improvements of 10-35% across claims and underwriting functions, while insurers pursuing enterprise-wide AI adoption strategies could see gains of as much as 30-50%.
Yet, the insurance business remains largely human-led at the front end.
“Insurance business continues to be largely push-driven, unlike some other financial services businesses where customers are more comfortable with self-service journeys,” said Krishnan Badrinath, head-IT at Tata AIG General Insurance. “Customers still prefer assisted journeys.”
Only 2-3% of policies are currently sold through fully digital journeys, he said.
However, once a policy enters the system, a growing share of the processing is handled through automated workflows. For standard retail products, STP is fully enabled across both direct-to-customer and agent-assisted channels, while claims are increasingly being processed through GenAI-powered optical character recognition (OCR) capabilities.
“The productivity has definitely increased, where the business is able to do more with the existing employees,” Badrinath said.
Gurpal Singh Dhingra, joint managing director at Prudent Insurance Brokers, said the insurance advisory has completely reworked its “internal systems to digitally capture all coverages and create digital slips for all our clients, and 80% of slips are now digital.”
“We are not seeing a decline in active headcount as much as we are seeing our people being freed from tedious, low-value work and able to spend more time with clients,” Dhingra said.
Despite the growing use of automation, industry executives do not expect the insurance workforce to shrink.
“There is already a shortage of skilled and trained insurance professionals in India, leading to a demand and supply imbalance,” Banerjee said. “Most companies are moving ahead not to cut hiring, but to enable speedy growth without accelerating the hiring process.”
As insurers push deeper into AI-led operations, the technology is increasingly becoming a tool for scaling growth and addressing talent gaps rather than reducing headcount.
