CSIRO and the Insurance Council of Australia have released a report showing how AI can help insurers and their customers. The research focuses on using AI to predict risks and improve the insurance system.
Around one in three Australian homes faces bushfire risk. One in 12 homes is exposed to flooding. Rising costs, labour shortages, and higher reinsurance fees have increased insurance premiums. Claims from natural disasters have grown nearly 50 per cent over the past five years and are expected to rise by 5 per cent each year until 2050.
Dr Alexandra Bratanova from CSIRO said AI can make insurance more affordable and responsive. AI can streamline operations, personalise customer experiences, detect fraud, and improve underwriting. It can also help predict the impact of natural disasters and support operational compliance.
The report identifies seven areas to guide responsible AI adoption: delivering better insurance, strengthening governance, fostering collaboration, adopting AI strategically, building workforce skills, becoming a trusted partner, and innovating insurance products.
Responsible use of AI is critical. Governance frameworks, privacy protection, and safeguards against bias are needed to ensure fair outcomes for all Australians.
ICA CEO Andrew Hall said AI can improve affordability and enhance disaster response. Effective AI use can help more Australians access financial protection while keeping customers at the centre of decisions.
The research was conducted with the ICA AI Working Group and draws on international best practices. It provides a practical roadmap for insurers to use AI responsibly while supporting resilient, customer-focused insurance services.