AI can help bridge customer gaps for microinsurers

Published on Jul 30, 2019

Updated on May 18, 2020

Microinsurance targets low-income households and individuals with little savings. Low premium, low caps, and low coverage limits are the characteristics of microinsurance plans. These are designed for risk-proofing the assets otherwise not served by traditional insurance schemes.

Because microinsurance comprises of low-premium models, it demands lower operational cost. This article covers insights on how AI can help bridge customer gaps for microinsurers.

Challenges in Distributing Microinsurance Policies

Globally, microinsurance penetration is just around 2-3% of the potential market size. Following are the challenges that companies providing microinsurance policies face-

Being a forerunner in a competitive landscape.
Making policies accessible through online channels.
Developing user-friendly interfaces understandable to a layman.
Improving the organization’s operational efficiencies by automating repetitive processes.
Responsive support system for both agent and customer queries.
Quick and easy reimbursements and claim settlements.

Fortunately, technology is capable of solving customer support, repetitive workflow, and scalability challenges to a great extent. The subsequent section measures the benefits of AI-based technology in the microinsurance sector.

Benefits of Technology Penetrating the Microinsurance Space

#1 Speeds up the Process

Paperwork, handling numerous documents, data entry, etc. are current tedious tasks. AI-driven technologies like intelligent document processing systems can help simplify the insurance documentation and retrieval process.

For example, Gramcover, an Indian startup in the microinsurance sector uses direct-document uploading and processing for faster insurance distribution in the rural sector.

Gramcover - automated document processing for faster microinsurance distribution

#2 Scalable and Cost-effective

Because of scalability, technology has also enabled non-insurance companies to distribute insurance schemes on a disruptive scale.

Within a year of launching the in-trip insurance initiative, cab-hailing service — Ola, is able to issue 2 crore in-trip policies per month. The policy offers risk coverage against baggage loss, financial emergencies, medical expenses, and missed flights due to driver cancellations/ uncontrollable delays.

AI-based systems are also cost-effective in the long run because the same system is adaptable across different platforms and is easily integrated across the enterprise.

The microinsurance space is in need of better customer-first policies that are both convenient and flexible to use. ‘On & Off’ microinsurance policies for farmers, especially when they need it, can bring about a change in their buying behavior. The freedom to turn your insurance protection off, when you are not likely to use or benefit from it can give customers the freedom to use a product that maximizes their utility.

At the same time, insurers will be able to diffuse their products with greater spread across the rural landscape because the customer is able to derive greater value from it.

#3 Easy and Customer-friendly Claims

Consumers want faster reimbursements against their plans. Going with the traditional process, claim settlement may take several months to approve. Through distributed ledgers and guided access, documents or information can be made available in a fraction of seconds.

MaxBupa, in association with Mobikwik, has introduced HospiCash, a microinsurance policy in the health domain. It has identified the low-income segment’s needs and accordingly takes cares of out of pocket expenses (@ ₹500/day) of the customers.

Mobikwik wallet ensures hassle-free everyday money credit to the user.

MaxBupa X MobiKwik Hospicash policy covering out-of-pocket expenses during hospitalization

Another example of easy claim settlement is that of ICICI Lombard motor insurance e-claim service. InstaSpect, a live video inspection feature on the Lombard’s Insure app allows registering claim instantly and helps in getting immediate approvals. It also connects the user to the claim settlement manager for inspecting the damaged vehicle over a video call.

Real-time inspection and claims can benefit farmers. In the event of machine or tractor breakdown, they need not wait for days for the claim inspector to come in-person and assess the vehicle. Instead, using Artificial Intelligence and Machine Learning models, the inspection can be carried out within seconds via an app, following which the algorithm can determine (based on trained models) to approve or reject the claim.

#4 Automating Repetitive Tasks

Entering data manually is subject to human error, whereas, data entered through scanners, document parsers, etc. are up to 99.94% accurate.

Microinsurance sector is also a victim of self-centered human behavior, where agents consider personal profit before the benefit of the user. Automating the customer/agent onboarding journey can improve the distributed sales network model too.

MaxBupa uses FlowMagic for processing inbound documents, for enterprise-wide flexibility and fit. With AI, they are able to halve the manned human effort for gains in operational accuracy.

Automation can bring down the challenges of mis-selling, moral hazard, and distribution costs to level zero with agnostic digital systems.

#5 Operational Efficiency

Where human employment calls for dedicated working hours, with chatbots, a large number of queries can be handled anytime during the day, weekends, and holidays. It is even convenient for customers also.

Religare, India’s leading insurance provider has introduced AI-based chatbots that can handle customer queries without needing human intervention. It is capable of helping a customer to buy or renew a policy, schedule appointments, updating contact details, and more. This technology has helped Religare to increase sales by 5X and increase customer interaction by 10X.

The microinsurance sector can also take advantage of chatbot technology to improve response time.

Final Thoughts

As more microinsurance products continue to surface in the market, insurers need to place the rural customer upfront and center of their strategic efforts. By understanding and fulfilling the rural insuree’s needs, cutting down operational costs through process automation such as adding AI-powered chatbots to handle general queries or quickly settling claims without the need for unnecessary human intervention — microinsurers can realize better market penetration and adoption for these policies.

Let’s take a trip back in time—2008. Netflix was nothing like the media juggernaut it is today. Back then, they were a DVD-rental-by-mail service trying to go digital. But here’s the kicker: they hit a major pitfall. The internet was booming, and people were binge-watching shows like never before, but Netflix’s infrastructure couldn’t handle the load. Their single, massive system—what techies call a “monolith”—was creaking under pressure. Slow load times and buffering wheels plagued the experience, a nightmare for any platform or app development company trying to scale

That’s when Netflix decided to do something wild—they broke their monolith into smaller pieces. It was microservices, the tech equivalent of turning one giant pizza into bite-sized slices. Instead of one colossal system doing everything from streaming to recommendations, each piece of Netflix’s architecture became a specialist—one service handled streaming, another handled recommendations, another managed user data, and so on.

But microservices alone weren’t enough. What if one slice of pizza burns? Would the rest of the meal be ruined? Netflix wasn’t about to let a burnt crust take down the whole operation. That’s when they introduced the Circuit Breaker Pattern—just like a home electrical circuit that prevents a total blackout when one fuse blows. Their famous Hystrix tool allowed services to fail without taking down the entire platform.

Fast-forward to today: Netflix isn’t just serving you movie marathons, it’s a digital powerhouse, an icon in platform engineering; it’s deploying new code thousands of times per day without breaking a sweat. They handle 208 million subscribers streaming over 1 billion hours of content every week. Trends in Platform engineering transformed Netflix into an application dev platform with self-service capabilities, supporting app developers and fostering a culture of continuous deployment.

Did Netflix bring order to chaos?

Netflix didn’t just solve its own problem. They blazed the trail for a movement: platform engineering. Now, every company wants a piece of that action. What Netflix did was essentially build an internal platform that developers could innovate without dealing with infrastructure headaches, a dream scenario for any application developer or app development company seeking seamless workflows.

And it’s not just for the big players like Netflix anymore. Across industries, companies are using platform engineering to create Internal Developer Platforms (IDPs)—one-stop shops for mobile application developers to create, test, and deploy apps without waiting on traditional IT. According to Gartner, 80% of organizations will adopt platform engineering by 2025 because it makes everything faster and more efficient, a game-changer for any mobile app developer or development software firm.

All anybody has to do is to make sure the tools are actually connected and working together. To make the most of it. That’s where modern trends like self-service platforms and composable architectures come in. You build, you scale, you innovate.achieving what mobile app dev and web-based development needs And all without breaking a sweat.

Is Mantra Labs Redefining Platform Engineering?

We didn’t just learn from Netflix’s playbook; we’re writing our own chapters in platform engineering. One example of this? Our work with one of India’s leading private-sector general insurance companies.

Their existing DevOps system was like Netflix’s old monolith: complex, clunky, and slowing them down. Multiple teams, diverse workflows, and a lack of standardization were crippling their ability to innovate. Worse yet, they were stuck in a ticket-driven approach, which led to reactive fixes rather than proactive growth. Observability gaps meant they were often solving the wrong problems, without any real insight into what was happening under the hood.

That’s where Mantra Labs stepped in. Mantra Labs brought in the pillars of platform engineering:

Standardization: We unified their workflows, creating a single source of truth for teams across the board.

Customization: Our tailored platform engineering approach addressed the unique demands of their various application development teams.

Traceability: With better observability tools, they could now track their workflows, giving them real-time insights into system health and potential bottlenecks—an essential feature for web and app development and agile software development.

We didn’t just slap a band-aid on the problem; we overhauled their entire infrastructure. By centralizing infrastructure management and removing the ticket-driven chaos, we gave them a self-service platform—where teams could deploy new code without waiting in line. The results? Faster workflows, better adoption of tools, and an infrastructure ready for future growth.

But we didn’t stop there. We solved the critical observability gaps—providing real-time data that helped the insurance giant avoid potential pitfalls before they happened. With our approach, they no longer had to “hope” that things would go right. They could see it happening in real-time which is a major advantage in cross-platform mobile application development and cloud-based web hosting.

The Future of Platform Engineering: What’s Next?

As we look forward, platform engineering will continue to drive innovation, enabling companies to build scalable, resilient systems that adapt to future challenges—whether it’s AI-driven automation or self-healing platforms.

If you’re ready to make the leap into platform engineering, Mantra Labs is here to guide you. Whether you’re aiming for smoother workflows, enhanced observability, or scalable infrastructure, we’ve got the tools and expertise to get you there.

AI can help bridge customer gaps for microinsurers

Challenges in Distributing Microinsurance Policies