Imagine if banking still worked the way it did in 2010. To send a friend ₹500, you would need their account number, their IFSC code, the name of their branch, and a two-hour window for the transfer to clear. You would do it through a clunky portal, re-enter a one-time password twice, and hope it went through. Then UPI arrived, and the whole ritual collapsed into a phone number and three seconds.

India did not get there by copying how America moves money. The United States, to this day, still runs a great deal of its payments on cheques and multi-day clearing. India skipped that entire chapter and built something the US does not have, and may never build.

Now hold that thought for a moment, because India’s motor insurers are about to make the opposite mistake. They are studying how American carriers move money, and quietly preparing to copy it.

A Tale of Two Claims

Picture Rajesh, who scrapes the side of his car against a gatepost in Pune on a Tuesday morning. He files a claim. In the version of the future his insurer is currently building, modelled faithfully on a leading US carrier, here is what happens. His identity is verified against the insurer’s internal records, with a callback to be safe. His registration papers are uploaded as phone photographs, run through optical character recognition, and bounced back twice because the scan was blurry. A surveyor is assigned, schedules a visit, and files a report. The claim is approved. Payment is initiated through a bank transfer that clears in a few days. Total time, in a good case, is a week and a half.

Now picture the same scrape, the same Tuesday, settled on rails that already exist in India today. Rajesh’s identity is confirmed in the moment through Aadhaar. His vehicle, including its registration, chassis number and insurance status, is validated in a single query against VAHAN, the national vehicle registry. His documents arrive already signed by the state through DigiLocker, so there is nothing to photograph and nothing to re-scan.

A surveyor still assesses the damage. That step does not disappear, and it should not. But everything around it, including proving who Rajesh is, proving the car is his and insured, and getting money into his account, collapses from days to minutes. The payout lands over UPI before the repair estimate has cooled.

Same claim. Same country. One version was designed for India. The other was imported. And the imported one is the version most Indian insurers are busy building.

The Playbook India Keeps Trying to Copy

To understand why this happens, you have to understand what the American playbook was built to fix.

In mature insurance markets, the single biggest obstacle to modern claims is not artificial intelligence or customer behaviour. It is old technology. Roughly three-quarters of insurers still run on outdated legacy systems, much of it core infrastructure built on mainframe and COBOL platforms decades ago. The cost of simply keeping that machinery alive is enormous. By one widely cited PwC estimate, around 70% of a typical insurer’s IT budget goes not to building anything new, but to maintaining the systems it already owns.

So when a US carrier publishes a glossy account of its “claims transformation,” what it is really describing is an escape from its own legacy systems. The American playbook is, at heart, a modernisation playbook. It assumes you are starting from a mainframe. It assumes data must be freed from monolithic systems before any model can touch it. And it assumes that verifying who a customer is, and getting money to them, are problems each insurer must solve for itself, vendor by vendor, at considerable cost.

This is not an abstract worry. It is already happening. In 2023, Duck Creek, one of the two core platforms that dominate the American property-and-casualty market, formally entered India, and HDFC ERGO became its first full-suite Indian customer, adopting its policy, claims, billing and rating systems across the insurer’s entire portfolio. Duck Creek itself describes the work honestly: delivering the platform in India required building “local layers” and an “India geographical layer” from the ground up. Read that carefully. The engine is a US-built core, proven on US carriers. India’s own infrastructure enters as a layer fitted around it. That is the quiet tell. When the imported platform is the starting point, Aadhaar, UPI and VAHAN become content you localise into the system, rather than the foundation the system is built on.

And here is the uncomfortable part. This is also the advice Indian insurers most often receive. Even McKinsey’s 2024 study of the Indian insurance industry urges carriers to lift profitability by modernising outdated technology and cutting technical debt. That is sensible counsel for the market that study describes. The mistake is assuming it travels. An Indian insurer that imports the American problem statement will spend years, and a great deal of money, rebuilding something it never needed to build.

The problem costing carriers elsewhere hundreds of billions has, in India, already been solved by the state.

What India Has That No Insurer Can Buy

India is the only major insurance market sitting on a fully deployed, population-scale digital public infrastructure. Most people know its parts without knowing the collective name. Aadhaar is identity. UPI is payments. DigiLocker is paperless, state-signed documents. The Account Aggregator framework is consent-based data sharing. Together they are called the India Stack, and no other country has anything like it as a shared public utility.

The scale is hard to overstate. UPI now clears well over 20 billion transactions in a single month, and crossed 22 billion in March 2026. It accounts for close to half of all real-time digital payments made anywhere on earth. Aadhaar has issued more than 1.4 billion identities. DigiLocker serves over 500 million registered users and has delivered more than 9 billion documents. Where an American carrier must go out and buy identity verification, payment rails and document exchange as three separate commercial products, an Indian insurer can draw all three from infrastructure that already exists, already works, and is already in the pocket of nearly every customer.

For motor insurance specifically, it runs deeper still. There is VAHAN, the national vehicle registry, where an authorised insurer can confirm a car’s registration, chassis number, owner and insurance status against one authoritative source. That is a check that, in America, is scattered across fifty state systems. There is also FASTag, the toll network, whose data can help establish where a vehicle actually was around the time of a claimed accident. No US or UK insurer has vehicle-registry or behavioural-toll data sitting there as a public good. Indian insurers do, and most treat it as a minor convenience for onboarding rather than the foundation it could be.

The Quiet Cost of Imitation

It is worth being concrete about what the imported approach costs.

Start with fraud. One of the most stubborn problems in Indian motor insurance is vehicle implantation, which means swapping an insured car’s credentials onto an uninsured car that was actually in the accident. The American answer is expensive: data brokers, investigator networks, and layers of manual scrutiny. The Indian answer can be structural. A real-time VAHAN check confirms that the credentials presented actually match the authoritative record. State-signed DigiLocker documents are far harder to forge than a phone photograph, and FASTag movement data can help place the real vehicle. None of this makes fraud impossible, but it raises the bar at the point of claim, using rails the insurer already has rather than an investigator network it has to build.

Then there is speed. American claim payouts often crawl through multi-day bank clearing. UPI settles in seconds, at any hour, at almost no cost. The near-instant claim settlement that insurtechs abroad are celebrated for is not a moonshot in India. It is just UPI, used properly. Every step the imported playbook treats as a cost to be optimised, whether identity, documents or payment, is a step the India Stack has already turned into a solved utility.

The Regulator Has Already Moved

There is one development every insurer should sit up for, because it makes this argument urgent rather than philosophical.

The IRDAI is itself building digital public infrastructure for insurance. Bima Sugam, the industry-owned marketplace, begins its commercial rollout in 2026, and motor insurance is the very first segment to go live. Alongside it, the regulator has proposed a Public Insurance Repository, a shared, fraud-curbing data layer for the whole sector. The IRDAI’s leadership has openly urged insurers to build on DPI rails rather than around them.

It would be easy to read this and conclude the regulator has done the job. It has not. Bima Sugam is a marketplace, a place to discover, compare and buy, with a shared data repository behind it. It is not a claims engine. An insurer that connects to Bima Sugam without rebuilding its own claims core on public rails will be easier to find and exactly as slow to pay. It will be more visible on a shiny new marketplace and entirely unchanged underneath. The regulator is laying the shared rails. The advantage still belongs to whoever rebuilds their own engine on them first.

Two Roads From Here

So the Indian motor insurer stands at a fork its American and European counterparts never reach.

One road is to build by imitation. Benchmark a celebrated US carrier, buy the same core platform, rebuild the same integration fabric, and treat Aadhaar, UPI and VAHAN as decorative bolt-ons to a system designed for a different country. Walk this road and, in three to five years, you become a competent Indian copy of an American insurer, competing on cost against a dozen rivals running the identical playbook, distinctive to no one.

The other road is to build by extension. Treat the India Stack not as a feature at the edge of the claims process but as its structural core. Rebuild identity, verification and payment around public rails, and let AI run natively on consent-mediated data. That last point, conveniently, is also the lowest-friction way to stay on the right side of the Digital Personal Data Protection Act. Walk this road and you reach cost and fraud economics that mature markets cannot match, for the simple reason that the rails do not exist in those markets at any price.

None of this is effortless, and it is worth being honest about the limits. DPI does not assess damage. Deciding whether a dented door is a ₹15,000 repair or a ₹45,000 one still takes a surveyor’s judgment, and that judgment is where much of a claim’s genuine cycle time and genuine fraud risk will always sit. What the India Stack removes is everything around that judgment, namely the dead time of identity checks, document chasing and payment clearing. DPI access is also consent-bound and regulated. The integration itself is straightforward, but the governance around consent and auditability is real work. The data is not flawless either, since VAHAN records still carry mismatches the authorities are actively cleaning up, so fraud models have to be engineered for noisy signal. And the engineering talent that genuinely understands these rails is still scarce. But that scarcity is precisely the opportunity. The insurer that builds this muscle now will, in three years, hold something competitors cannot quickly buy.

The Larger Point

The reason the UPI story matters is not nostalgia. It is that India has done this exact thing before. It looked at a slow, expensive, imported way of doing something, declined to copy it, and built something better that the originating country still cannot replicate.

Motor insurance claims are the next obvious candidate. The infrastructure is already live, sitting there as a set of working APIs used millions of times a day for everything except, oddly, the insurance claim it could transform. What is missing is not technology and not capital. It is the conviction to stop copying the wrong country.

Rajesh, scraping his car against that gatepost, does not care which playbook his insurer studied. He cares whether the money arrives before the inconvenience compounds into something worse. India has quietly built the means to make sure it does. The only open question is whether its insurers will choose to use what their own country has already built for them, or spend the next decade importing a problem they were lucky enough never to have.

Sources

Earnix — Data Modernization for Insurance: 74% Still Use Legacy Technology https://earnix.com/blog/overcoming-legacy-technology-the-future-of-insurance-innovation/

Duck Creek Technologies — Expands to the Indian Market, with HDFC ERGO as First Full-Suite Customer https://www.duckcreek.com/blog/duck-creek-technologies-expands-to-the-indian-market-offering-its-global-core-technology-platform-to-india-based-insurance-carriers/

Duck Creek Technologies — Successfully Delivers HDFC ERGO’s New Core Solution in Nine Months https://www.duckcreek.com/blog/duck-creek-delivers-hdfc-ergos-solution/

McKinsey & Company — Steering Indian Insurance from Growth to Value in the Upcoming Techade https://www.mckinsey.com/in/our-insights/steering-indian-insurance-from-growth-to-value-in-the-upcoming-techade

Unique Identification Authority of India — Aadhaar Dashboard https://uidai.gov.in/aadhaar_dashboard/india.php

National Payments Corporation of India / Prasar Bharati News — UPI Transaction Data https://www.newsonair.gov.in/upi-transaction-volume-rises-29-year-on-year-to-21-63-billion-in-december

Ministry of Electronics & IT / Prasar Bharati News — DigiLocker User Data https://www.newsonair.gov.in/india-and-kenya-sign-implementation-framework-agreement-for-digilocker-pilot-project-in-kenya

Ministry of Road Transport & Highways — VAHAN National Register https://vahan.parivahan.gov.in/nrservices/

Business Standard — Bima Sugam to Launch Standardised Products in Life, Health, Motor Segments https://www.business-standard.com/finance/insurance/bima-sugam-to-launch-standardised-insurance-products-this-year-126031701224_1.html

International Monetary Fund — Stacking Up the Benefits: India’s Digital Journey https://www.elibrary.imf.org/view/journals/001/2023/078/article-A001-en.xml

DQ India — Fighting Insurance Fraud in India with Technology https://www.dqindia.com/features/fighting-insurance-fraud-in-india-with-technology-8732916