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The insurance sector of India is witnessing a strong digital-led transformation, and two-wheeler insurance is at the heart of this shift. According to a report by the India Brand Equity Foundation (IBEF), the domestic insurance industry has grown at a steady 17% CAGR over the past two decades and is projected to reach ₹19,30,290 crore by Financial Year 2026.

While digital sales and paperless bike and car insurance renewal play a role, experts widely agree that faster and tech-driven digital claims processing has emerged as a key driver accelerating growth and customer adoption. Keep reading to get a detailed idea of the role of digital claims.

What is the Role of Digital Claims in two-wheeler insurance?

Although historically the claim was the biggest pain point for riders, in the recent period, the digital claim settlement has transformed from being a luxury to a strategic necessity. There is no doubt that this is directly fueling the motor insurance industry’s expansion. Here is how:

1. Faster Claim Settlement

In the traditional vehicle insurance model, even a minor accident involved days of physical inspections, surveyor visits, and endless follow-ups. Most of the time, it caused high-stress moments leading to customer dissatisfaction. 

Since touchless claim settlements came into the picture, it is now only a matter of a few minutes. The benefits of faster claim settlement include:

• Policyholders can now upload photos or videos of the damage directly through a mobile app without visiting the insurance office in person.
• Insurers can use AI-powered tools and algorithms to analyse accidental reports in real-time, estimating repair costs instantly. 
• Reducing off-road time for commuters changes their narrative of insurance from a legal burden to a high-utility product.

2. Building Trust Through Transparency

Through real-time tracking, the digital claim procedure has helped overcome the major barrier of trust deficit towards insurers. It has also increased their claim settlement ratios, indicating reliability. Here is how it has been beneficial:

• Similar to tracking a food delivery, policyholders can check their claim settlement status. They have access to updated information regarding whether their claims are under review, a surveyor assigned or the payment initiation stage.
• The transparency eliminates the requirement of a middleman.
• It helps in reducing anxiety and fosters a sense of reliability.

3. Fraud Detection and Cost Efficiency

Growth refers to both bringing new customers and maintaining existing customers. According to a report published by The Times of India, in 2025, approximately 10% to 15% insurance claims were recognised as fake. It has been found that fraudsters created fake identities using Aadhar cards and initiated fictitious claims.

However, with digital claims, such fraudulent activities can be tracked. This is how:

• The integrated Machine Learning (ML) and Blockchain identify patterns of repeated claims from specific locations or individuals.
• Cross-verification of accident data with external sources (weather, traffic, and GPS) is now possible.
• Reduction of revenue leakage helps insurers to maintain healthier loss ratios.
• The advanced technology also maintains a tamper-proof ledger of vehicle history.

4. The Rise of Usage-Based Insurance (UBI)

The digitalisation of claims has paved the way for innovative products such as Pay-as-you-drive. So, insurers can leverage Telematics data (GPS and sensors) to analyse the rider’s driving efficiency. As a result:

• Riders who avoid sudden braking or have no history of over-speeding can receive “No Claim Bonus” discounts or premium discounts during claim settlement.
• When a vehicle sensor detects a high-impact crash, the insurer can proactively reach out to the rider to initiate a claim even before they make a call.

5. Seamless Integration with the Digital India Ecosystem

Last but definitely not least, various governments’ digital initiatives have contributed to the growth of two-wheeler insurance. The integration with platforms such as DigiLocker and mParivahan has not only made policy purchase seamless but also made claim settlement smoother and faster. Now, verification of vehicle registration and license details does not require any physical documents.

Furthermore, the Bima Trinity framework (Bima Sugam, Bima Vistaar, and Bima Vahak) is working towards fulfilling the government objective of Insurance for All by 2047. This digital India ecosystem approach reduces friction, making insurance-on-the-go a reality for all kinds of vehicles in India.

Final Words

With consistent technological evolution, it is quite evident that insurers who offer seamless claim experience digitally are inevitably going to lead the market in 2026. By prioritising faster claim settlement with transparency and data-driven accuracy, these insurers are going to redefine the future of motor insurance with the largest penetration not only in Tier 1 but also in Tier 2 and Tier 3 cities in India.