Australia's three largest general insurers - Suncorp, IAG and QBE - are moving from AI experimentation to full-scale deployment across claims, underwriting and customer service. The acceleration comes as the Australian Securities and Investments Commission and the Australian Prudential Regulation Authority jointly warned in August that financial firms must move beyond awareness and take concrete action on AI-related risks.
From building to scaling
Suncorp CEO Steven Johnston told investors on an Aug. 12 earnings call that the company has completed foundational investments in core technology, strategic partnerships and governance frameworks. "We are now entering a period where the focus shifts from building those capabilities to leveraging them to better deliver better outcomes for our customers," Johnston said. Recent deployments have focused on productivity improvements, which contributed to a better expense ratio in the latest fiscal year.
IAG has seen more than 60% of its workforce regularly using AI tools, with over 600 internal "activators" publishing more than 90 AI agents across customer service, operations and corporate functions. CEO Nicholas Hawkins said the insurer's partnership with OpenAI will accelerate claims handling, particularly during natural disasters. IAG plans to invest about A$400 million in AI and technology modernization for fiscal 2027, a move CFO William McDonnell expects will further reduce costs.
QBE Group CEO Andrew Horton reported that AI solutions have cut marine claims cycle times by 88% in the Asian portfolio. The insurer plans to at least double the number of production agents across underwriting and claims to drive lower loss ratios and faster pricing. Despite the upbeat messaging, shares in all three insurers traded downward in August.
Regulators demand board-level action
ASIC Commissioner Simone Constant delivered a blunt assessment in August: "The urgency of this challenge cannot be overstated. Threat actors are exploiting frontier AI models to identify and exploit vulnerabilities that previously may have taken a team of professionals months to find." A joint statement from ASIC and APRA urged boards to make key decisions on risk appetite, escalation authority and recovery priorities before a crisis hits.
APRA had already warned in April that boards need to deepen technical literacy and strengthen governance over AI risks. The regulator recommended maintaining sufficient AI literacy at board level, overseeing AI strategies aligned to risk appetite, and ensuring effective monitoring and fallback processes for AI-supported critical operations. Concentration risk with third-party providers and unpredictable model behavior were flagged as evolving threats requiring active board attention.
How insurers are responding
Suncorp has embedded AI governance within its existing risk management framework, covering ethics, cybersecurity, data governance, privacy and regulatory compliance. Chief Technology Officer Priyanka Paranagama said the board and leadership receive regular AI briefings, and the insurer has diversified its AI services across multiple platforms to manage concentration risk. "Adoption of risk controls and monitoring is an inherent part of our AI execution," Paranagama said.
QBE has updated its AI policies, established oversight forums and strengthened third-party risk assessments. A spokesperson said the company closely monitors guidance from both regulators and recognizes that responsible AI adoption requires "strong governance, transparency, appropriate oversight, and effective risk management." IAG did not respond to requests for comment on its governance approach.
For executives tracking how peers in heavily regulated industries are handling AI risk, the AI for Insurance sector offers a useful lens - these firms are balancing rapid deployment against regulatory pressure in real time. The tension between efficiency gains and governance demands is now a board-level concern, not just a technology discussion, which aligns with broader AI for Executives & Strategy priorities around oversight and risk appetite.
Why this matters for management
The Australian experience shows regulators are no longer satisfied with AI awareness or policy drafts. They want boards making specific decisions - on risk appetite, escalation paths and recovery priorities - before deployment scales further. For managers outside financial services, the signal is clear: if your organization is scaling AI without documented board-level governance, you are already behind the regulatory curve that Australian insurers are navigating now.
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