Introduction
Digit Insurance already uses smartphone self-inspection and AI-assisted damage assessment for motor claims. The next step under discussion: automatically approve small motor own-damage claims, say under ₹20,000, within minutes when the AI is confident, without a human assessor. This could transform the customer experience. But automated approvals could also raise fraud and overpayment. The trade-off: instant AI approval for small claims, or keep human review for every claim?
Analysis Approach
I'll clarify the context, identify the type of trade-off, understand both options, agree on a hypothesis, choose metrics, design an experiment, plan the analysis, set a decision framework and recommend next steps.
Step 1
Clarifying Questions (3 minutes)
- Which claims? Private car and two-wheeler own-damage claims under ₹20,000, from self-inspection, for customers with valid policies.
- What happens today? AI suggests an estimate; a human assessor reviews and approves, usually within several hours.
- How common are small claims? Assume about 40% of motor own-damage claims by count but around 12% by value.
- What is the fraud rate today? Assume confirmed fraud of about 1.5% of small claims, with some undetected leakage.
- Regulatory constraints? IRDAI allows insurers to settle without a survey below certain thresholds; claim decisions must be fair and documented.
- Goal? Improve customer experience and renewals while keeping loss ratio and leakage under control.
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