Technology for Affordable & Accessible Insurance: Serving India's Underserved Population

The Indian insurance industry has seen massive growth over the last few years, with insurance penetration increasing from 2.7% in 2000 to 4.2% in 2020-21. However, the proportion of the uninsured and underserved continues to be significant. The underserved population includes people living in rural areas, Tier 3/4 cities, low-income households, and those working in the informal sector. This population often faces financial instability and is at risk of being pushed further into poverty due to unforeseen events like illness, accidents, or natural disasters.

In this blog post, we will discuss how technology can be used to offer affordable and accessible insurance products to the underserved population. We will also highlight the challenges faced by this segment and how technology can help overcome them.

According to the Economic Survey 2022-2023, India is poised to emerge as one of the fastest-growing insurance markets in the coming decade. However, more needs to be done to accelerate this process, and technology-led models could be the game changer.

The Challenges Faced by the Underserved Population

The underserved segment faces challenges at multiple levels:

  • Availability of suitable products that help them cover their specific financial risks while at the same time being affordable
  • Easy access to the products and a trusted partner to take them through the process of explaining the product to actual usage and claim settlement

How Technology Can Help

Technology has had a transformative impact on the insurance industry. Insurtech is being seen as a way to bridge the gap by leveraging technology to offer affordable and accessible insurance products to low-income customers, customers in remote areas. The industry has been able to disrupt by means of reducing costs, increasing efficiency, and providing better service models to customers through technological advancements.

The Problem of Access

In the past, the only means of reaching the end customer in this segment was through a physical presence. However, with greater availability of mobile phones including smartphones, internet, and other digital platforms, touchpoints have increased. This has also helped reduce customer acquisition costs to a certain extent. Digital issuance has been increasing, and with IRDAI allowing issuance through Digilocker, the process has received a major boost. Additionally, initiatives like the Ayushman Bharat Digital Mission (ABDM) (that is creating the necessary digital health infrastructure) reinforce the government’s focus on digital.

The Problem of Suitable Products

With increasing digital behavior and history, companies are able to use data analytics and AI for risk assessment and product pricing, thus enabling newer product development for this market. Technology has enabled insurance companies and insurance distributors to reach out to a wider population and offer customized insurance products and services that cater to the specific needs of the underserved population.

In addition, digital platforms are enabling insurance providers to offer more flexible insurance products such as pay-as-you-go or on-demand insurance. These products allow customers to purchase insurance coverage when they need it, providing more affordable and accessible insurance for the new to insurance target population.

The Problem of a Viable Distribution Model

Financial Institutions have the willingness and the appetite to design products for this segment. However, the dearth of suitable and commercially viable distribution models was one of the factors for under-penetration of formal financial services, especially insurance and savings in this segment. Evolution of newer distribution models like digital platforms, micro-insurance agents, and partnerships with non-financial institutions like telecom companies, e-commerce platforms, and FMCG companies can help overcome this challenge.


Technology has the potential to revolutionize the insurance industry and offer affordable and accessible insurance products to the underserved population. With the right use of technology, insurance companies can reach out to a wider population and offer customized insurance products and services that cater to the specific needs of the underserved population. At Riskwolf, we enable insurers to build and operate parametric insurance at scale using unique real-time data and dynamic risk modeling. Get in touch with us to learn more about how we can help you turn real-time data into insurance.

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