The Australian Financial Complaints Authority has ruled out using artificial intelligence to make dispute decisions but is considering its potential for other efficiencies.

Lead insurance ombudsman Emma Curtis says the service is monitoring AI use in complaint submissions and exploring where else it could be useful.

“We will never use AI to make decisions, but we’re looking and testing how we can use AI to make our processes more efficient,” she told a members’ forum today.

AI can be helpful for dispute parties but is contributing to “lengthy and voluminous submissions” that may include unsubstantiated peripheral matters.

“Unfortunately, [this] doesn’t help complainants or insurers, and it slows down the process,” senior ombudsman Chris Liamos said.

Mr Liamos says an AI-produced document may on the surface seem compelling, but “when you scratch it, there’s a lot of issues and mistakes, which is why I myself and no other decision-maker would ever be using it to make decisions”.

Related article: AI-written complaints too long and often wrong, ombudsman says

AFCA will soon release a practical guide for hail claim complaints, detailing submission lengths and clarifying types of relevant information, and highlighting that parties have responsibility for ensuring references are correct.

Mr Liamos says hail complaints often arise when multiple inspections produce different conclusions and it is disputed whether “actual damage for the purposes of the policy” exists.

“We’re also seeing increasing complaints about the extent of repairs, particularly whether the roof requires a full replacement, as opposed to maybe just partial repairs, or when variations are being sought once works are under way,” he said.

Ms Curtis says AFCA is seeing a high volume of complaints, with a 31% year-on-year increase in disputes resulting from declared catastrophes or significant events in the year to March.

Costly events for insurers have included severe hailstorms in October and November in NSW and Queensland, which followed earlier floods and storms.

“What this means, in practice, is pressure,” Ms Curtis said. “Pressure on insurers, on consumers, on the outsourcing arrangements that insurers have in place with their builders and their assessors. And it also means pressure on complaint resolution processes such as ours.”

Complaints relate to claim denials, assessments, scope of repairs and “what is generally a fair outcome in the circumstances”, she says.

---

From the latest Insurance News magazine: The industry's tech experts discuss their hopes and fears as the AI revolution gathers pace

---