IRDAI is taking steps to make sure your insurance data remains protected as insurers increasingly use Artificial Intelligence (AI) for claims, fraud detection and customer service. On
June 17, 2026, the regulator formed a dedicated AI Working Group to study the use of AI in insurance and recommend guidelines for its safe and responsible adoption.
The aim is simple: help insurers use AI to improve services without compromising customer privacy, security or fairness. Here's what this new initiative means for policyholders and the future of insurance.
Key Updates on Using AI in Insurance
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IRDAI has formed an AI Working Group to study the use of Artificial Intelligence in insurance and recommend industry-wide guidelines.
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Customer data protection is a key priority, with a focus on ensuring personal and financial information remains secure.
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Human oversight will continue to be important, especially for critical decisions such as claims and grievance handling.
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Insurers will be expected to manage AI-related risks, including biased outcomes, inaccurate results and misuse of customer data.
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The initiative aims to promote responsible AI adoption, balancing innovation with fairness, transparency and policyholder protection.
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AI is expected to play a bigger role in insurance, particularly as digital initiatives like Bima Sugam expand across the sector.
What Does IRDAI's AI Working Group Mean for You?
For policyholders, this initiative aims to make insurance services safer and more trustworthy as AI use grows. The recommendations from the AI Working Group could lead to stronger safeguards for personal information, clearer standards for how customer data is used and better protection against unfair automated decisions.
Over time, customers may also benefit from faster claim processing, quicker support and more efficient digital services. At the same time, important decisions that affect policyholders are expected to remain subject to appropriate checks and oversight.
In short, let's say you want to buy a
family health insurance plan. The goal would be to help you benefit from the convenience of AI-powered claims services without compromising privacy, security or fairness.
What are the Functions of IRDAI's AI Working Group?
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Create guidelines for AI use in insurance: The group will recommend how insurers should use AI across areas such as claims processing, underwriting, fraud detection and customer service.
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Ensure fair and transparent outcomes: The group will work to reduce the chances of biased or unfair decisions and encourage insurers to be transparent about how AI influences important processes.
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Maintain human involvement in key decisions: It will recommend where human review should remain necessary, especially for claim settlements, grievance handling and other critical decisions affecting customers.
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Address risks associated with AI: The group will help identify potential risks such as inaccurate outputs, system failures or misuse of AI and recommend measures to manage them.
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Support responsible adoption of AI: It aims to help insurers use AI to improve efficiency and customer experience while ensuring policyholders' interests remain protected.
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Develop a long-term AI governance framework: Based on its recommendations, the group will help create a structured approach for the safe, ethical and accountable use of AI in the insurance sector.
How Will AI Help Insurance?
Faster Claim Processing
AI can help insurers review claim documents, verify information and identify missing details more quickly. This can reduce processing time and help policyholders receive faster claim decisions.
Better Fraud Detection
Insurance fraud increases costs for both insurers and genuine customers. AI can analyse large amounts of data to identify unusual patterns and flag potentially fraudulent claims for further review.
Improved Customer Support
AI-powered chatbots and virtual assistants can answer common queries, provide policy information and offer basic assistance at any time of the day. This reduces waiting times for customers.
More Accurate Risk Assessment
AI can help insurers analyse data more effectively when assessing risks. This may lead to more suitable policy recommendations and fairer pricing for customers.
Safer Use of Customer Data
With IRDAI's new AI framework, insurers will be encouraged to use AI more responsibly to protect customer data. This means that your sensitive data will not be misused and will be protected from getting into the hands of fraudsters or scammers.
Key Takeaways
IRDAI has formed an AI Working Group to guide how Artificial Intelligence should be used in the insurance industry. The goal is to help insurers improve efficiency while protecting customer data and maintaining fairness.
This new initiative focuses on data privacy, human oversight and responsible AI adoption. For policyholders, this could lead to faster claims, better service experiences and stronger safeguards for personal information as insurance becomes increasingly digital.
As IRDAI's new approach strengthens AI governance, you can look forward to a more secure and transparent digital experience. At IndusInd General Insurance, we aim to combine technology through smart apps and AI-powered claims service with convenience and trust to provide a seamless experience across
health insurance,
motor insurance and
travel insurance.
FAQs
What is IRDAI's AI working group?
IRDAI's AI Working Group is a committee set up by the Insurance Regulatory and Development Authority of India (IRDAI) to study and guide the use of AI in the insurance sector. It has 7 members, led by Professor Sandeep K. Shukla, Director of IIIT Hyderabad and includes other industry and cybersecurity experts.
How does AI work in insurance?
AI analyses large amounts of data to help insurers process claims faster, detect fraud and improve customer service.
Will insurance processes be replaced completely by AI?
No. Human oversight will still be needed for important insurance decisions and customer support.
Disclaimer: *T&C Apply. For more details on risk factors, terms conditions, brochure, and exclusions, please read the policy wording and CIS carefully before concluding a sale.