Account Aggregator Could Unlock ₹1 Lakh Crore for India’s Insurers

A new report from Sahamati and the India InsurTech Association, with support from KPMG in India, argues that India’s Account Aggregator (AA) framework can remove long-standing frictions in insurance distribution and underwriting. By enabling customers to share verified financial data with consent, the AA ecosystem could expand the insurable population, speed underwriting from days to minutes and create a sizable premium opportunity for insurers.

The report estimates the AA framework could make between 33 crore and 40 crore previously underserved people newly insurable. Gig workers, the self-employed and informal-economy employees often lack formal proof of income or employment. The AA model lets these customers surface a digital financial footprint from multiple accounts with explicit, informed consent. That verified data is what insurers need to underwrite risk reliably.

One of the clearest operational benefits is speed. The report highlights the potential to shorten underwriting cycles from days to minutes. In addition to faster decisions, the shift to real-time, verified inputs is projected to save the industry about ₹218 crore annually through efficiency gains. KPMG frames this not just as cost reduction but as a step toward more accurate, scalable risk pricing.

Fraud reduction and better persistency

Access to source-verified financial data also helps detect anomalies earlier and reduce fraud. The report estimates up to an 8 per cent saving through early detection and source-based verification. On persistency, AA-enabled underwriting and servicing could reduce 13-month lapse rates by about 30 percent, improving long-term policy value for insurers.

Early evidence from pilot deployments

The report points to live applications where AA is already shaping outcomes. In life insurance underwriting, early deployments have cut turnaround times dramatically and improved customer adoption by making the process more convenient and trust-led. The AA model replaces manual document gathering with verified, consented data flows, simplifying renewals, claims verification and other policy servicing tasks.

Industry and policy steps the report recommends

Sahamati and its partners call for both organisational readiness and policy action. Insurers need to redesign customer journeys, invest in consent-led interfaces and strengthen internal processes to use AA data effectively. On policy, the report recommends expanding the financial information universe and reducing authentication friction so more customers can use AA with minimal barriers.

Shalini Gupta, Chief Policy and Advocacy Officer, Sahamati, said, “The AA framework offers the insurance industry a practical way to strengthen financial underwriting, policy servicing, and product innovation. Throughout this report, we have focused on how these capabilities can be applied with the customer at the centre. We see this as an opportunity in the financial services industry to foster the next wave of inclusion and innovation in insurance.”

Prerak Sethi from the India InsurTech Association said, “We launched this report to highlight how consent-based data can fundamentally reshape the way insurers and insurTechs serve people. The Account Aggregator framework is built on trust and transparency, and it enables the industry to design products that truly understand and serve the customer.”

Kailash Mittal, Partner - FRM and Head of Insurance, KPMG in India, added, “The Account Aggregator framework will be a real game changer for the insurance industry. It allows risk to be priced more precisely, persistency to be predicted more reliably, and fraud to be managed proactively. Moreover, AA reduces information asymmetry and strengthens risk management across insurance operations. It’s more than just efficiency; it’s about reshaping insurance to make it more accessible, transparent, and sustainable and taking us closer to the vision of Insurance for All by 2047.”

The report’s numbers are ambitious: unlocking roughly ₹1 lakh crore in new premium revenue and bringing tens of crores into the insurable population. Realising that potential will require coordination across insurers, insurTechs, regulators and data providers. For insurers, the immediate tasks are technical integration, process redesign and demonstrable pilots that translate verified data into better pricing, lower fraud and higher persistency. For policymakers, easing authentication friction and broadening data coverage will be critical.