S&P has shared statements from Australian insurers detailing how they mitigate risk as their use of AI ramps up.

IAG, Suncorp and QBE are “entering a new phase in their AI initiatives following foundational investments”, the ratings agency says.

“After building their respective core technologies and partnering with technology companies such as Microsoft, OpenAI and Aurora, insurers are focusing on leveraging AI in various parts of their businesses.”

But last month, regulators said frontier AI is accelerating cyber and operational threats and “the urgency of this challenge cannot be overstated”.

Suncorp CTO Priyanka Paranagama told S&P that AI governance is embedded in risk management, covering ethics, cybersecurity, data governance, privacy and regulatory compliance.

The board and leadership receive regular AI briefings, and to manage concentration risk the insurer has diversified its use of AI services and products across platforms.

“Adoption of risk controls and monitoring is an inherent part of our AI execution,” Mr Paranagama said.

QBE told S&P it is investing in AI governance, workforce capability and cyber resilience. It has updated AI policies, created oversight forums and strengthened third-party risk assessment.

“Responsible AI adoption requires strong governance, transparency, appropriate oversight and effective risk management,” a spokesperson said.

Results briefings last month revealed new details of insurers’ AI rollouts.

Suncorp CEO Steve Johnston said the insurer was “entering a period where the focus shifts from building those capabilities to leveraging them”.

The group is ramping up AI adoption, especially in claims and customer service. So far, this has improved productivity and the expense ratio.

IAG CFO William McDonnell said the plan was to invest about $400 million in AI and technology modernisation this financial year.

CEO Nick Hawkins said more than 60% of IAG’s workforce regularly used AI, with more than 90 AI agents activated to improve customer service, operations and corporate functions. A partnership with OpenAI is expected to further accelerate AI in claims handling, especially during severe events.

QBE CEO Andrew Horton said AI had cut marine claims duration by 88% and the insurer planned to at least double the scale of production agents across underwriting and claims, to lower loss ratios, speed up claims and improve pricing.