Digital Public Infrastructure and Agentic AI: Shaping the Future of Insurance in India

Abstract

The Indian insurance sector is in the process of structural transformation of traditional agent-based distribution to technology-based ecosystem (Atlantic Council, 2025; Deloitte, 2025; EY, 2025; KPMG, 2025; Sharma et al., 2024). This conceptual paper focuses on the key contribution to this change represented by Agentic Artificial Intelligence (Agentic AI) systems in which decisions are made autonomously, adapt continuously, and are goal-oriented (He and Zhu, 2025; Hosseini et al., 2025; Sapkota et al., 2025). Rather than presenting empirical findings, the paper synthesizes secondary sources such as peer-reviewed literature, regulatory reports, and industry reports to develop a conceptual analysis of the transformation of four fundamental insurance value chain functions by Agentic AI: sales, underwriting, claims management, and policy servicing The analysis is designed by using Sense-Insight-Dynamics (SID) framework, a new framework that builds on the classical scheme of Perception-Cognition-Action agent framework (Wooldridge and Jennings, 1995; Russell and Norvig, 2016) by integrating in domain-specific insurance contexts. The paper explores how India Digital Public Infrastructure (DPI) has a fundamental role in facilitating scalability of these smart systems (Atlantic Council, 2025; Harvard Kennedy School, 2025; ORF America, 2025). There is also a critical evaluation of implementation issues such as algorithmic bias in the socio-culturally stratified society of India, integration with the old system, the overstaffed local population, lack of digital literacy in rural regions, and consent fatigue in DPI frameworks. The results are added to the increasing literature on AI-based financial inclusion in developing markets.