A new report claims artificial intelligence (AI) can help solve major problems in Australia’s insurance sector. It says AI can ensure Australians are better protected.
The report is from the Commonwealth Scientific and Industrial Research Organisation (CSIRO) and the Insurance Council of Australia (ICA). It is called, “AI for Better Insurance: Enhancing Customer Outcomes amid Industry Challenges.”
The research explores how AI can help insurers manage rising costs and growing natural disaster risks. It also looks at changing customer needs.
The report highlights the scale of the problem. Currently, about one in three Australian properties face bushfire risk. That equals 5.6 million homes. Another 1.36 million homes are exposed to flood risk.
These dangers, combined with inflation and labour shortages, have pushed insurance premiums higher. Claims costs are also rising.
Claims for catastrophic events have jumped by nearly 50% in the past five years. They are expected to keep growing by 5% each year until 2050.
CSIRO project lead Dr. Alexandra Bratanova stressed the importance of the research. “The insurance sector is facing significant pressures from climate change, rising costs, and shifting customer demands,” she said.
The research identified seven key areas for responsible AI adoption. Dr. Bratanova said this could improve affordability, customer service, and industry resilience.
ICA CEO Andrew Hall called the research vital. He said the industry is beginning to embrace AI to serve customers better.
“By implementing AI solutions effectively, we can improve affordability,” Mr. Hall said. He added that AI could enhance disaster response and recovery.
Mr. Hall also said the industry is committed to safe AI adoption. This means addressing privacy concerns and AI system biases. The goal is to ensure these technologies serve all Australians fairly.
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