Australia’s general insurers are expanding their use of artificial intelligence across underwriting, claims, customer service and other operations, while regulators are placing greater emphasis on managing the risks associated with the technology. The sector is moving from experimentation towards wider deployment, making governance, data quality, model oversight and accountability increasingly important as insurers integrate AI into business processes.
The regulatory focus is particularly relevant where AI systems influence pricing, underwriting decisions, claims assessment or customer outcomes. Insurers need to understand how models operate, monitor their performance and maintain appropriate controls around data and decision-making. The growing use of AI also creates risks involving bias, explainability, privacy, cybersecurity and model errors, requiring insurers to establish clear accountability rather than treating AI as a purely technology function.
The Australian experience highlights a wider insurance-industry trend: AI adoption and AI risk management need to develop together. As insurers increase reliance on automated systems, robust governance, testing, monitoring and human oversight become important safeguards. For insurance risk professionals, the challenge is to capture AI-driven efficiency while ensuring that technology does not introduce uncontrolled underwriting, claims or operational exposures.
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