Insurance businesses are ahead of the global average when it comes to investing in artificial intelligence, though the pace of implementation is slow compared with other industries, according to a KPMG report.

KPMG Australia partner Caroline Leong says insurers are “taking a measured approach”.  

“We’re seeing significant interest in AI, with many insurance organisations trialling proofs of concept within niche areas. There is still hesitancy around wider deployment, exacerbated by challenges around the speed at which AI is evolving, data quality, bias and regulatory compliance,” Ms Leong said.

In the report, Zurich Australia chief data officer John Kim says the insurer’s local operation has an AI governance committee that meets monthly to “ask the questions around ‘should we?’ vs ‘could we?’ ”

Monitoring is constant, to ensure AI is not creating biases with the data used to train models. “Ethical use of the outcomes requires ongoing review,” he says.

Mr Kim says Zurich Australia has been leveraging AI for some time, with teams using optical character recognition, for example, to make back-office functions more efficient. Machine learning is used to optimise processes such as quality assurance and pricing models.

“While our AI adoption has historically been focused on tailored, bespoke solutions, we are committed to exploring scalable applications to further enhance our capabilities. This includes what we call human-automated risk management, a process in which the underwriting teams receive all the data points needed to underwrite risk with little to no time spent looking at documentation,” Mr Kim says.

“In a couple of years’ time, we should not have the need or processes to perform manual data entry, consolidation or aggregation of information.

“We want to use Copilot platforms to improve productivity, not just with our technology team, but to also support front-line workers.”

Zurich staff are not allowed to use AI solutions or systems that have not been approved.

Mr Kim says the mechanisms for interacting with customers will change significantly. “Will we have a website? Will there be claims forms? AI will enable change across the organisation and drive large-scale transformation.”

See the report here.