New Delhi, Sept. 28 -- The next phase of growth in India's insurance sector is likely to depend increasingly on how effectively insurers expand distribution beyond traditional channels, with artificial intelligence (AI)-led customer discovery and ecosystem partnerships emerging as key drivers of insurance penetration, according to a McKinsey report.

McKinsey said insurers are reassessing the traditional direct-to-customer (D2C) model as customers increasingly discover and evaluate products through AI-powered search and conversational interfaces.

The traditional D2C model has relied significantly on aggregators and paid customer acquisition channels. According to the report, this has resulted in high customer acquisition costs and limite...