Claims AI, pricing algorithms, and underwriting models under APRA, ASIC, and the General Insurance Code.
Nearly 90% of Australian insurers now use artificial intelligence in claims processing. ASIC has found governance frameworks have not kept pace. APRA CPS 230 is in force, FAR extended to insurers from March 2025, and Privacy Act 2024 transparency requirements arrive in December 2026.
Built for
What an insurance engagement delivers.
Full engagement methodologyClaims, pricing & underwriting inventory
A documented register of every AI system across claims, pricing, underwriting, and fraud detection, risk-tiered against regulatory scrutiny.
Bias & proxy variable testing
Fairness analysis aligned to the AHRC and Actuaries Institute joint guidance on AI and discrimination in insurance.
Material service provider register
CPS 230 register entries for insurtech AI vendors, including fourth-party risk and concentration analysis.
AFCA-ready explainability
Adverse decision documentation and human review paths that hold up at the Australian Financial Complaints Authority.
Four governance pressures on Australian insurers.
AI-driven fraud detection saves the Australian insurance industry an estimated AUD $2.2 billion annually. Claims automation settles simple cases in minutes. Regulators are watching, and governance gaps expose businesses to enforcement action, AFCA complaints, and reputational damage.
- 01In force
CPS 230 puts claims, pricing, and underwriting AI in scope.
APRA CPS 230, effective since July 2025, classifies all AI systems used in underwriting, claims handling, and pricing as operational risks requiring documented identification, assessment, and management. Third-party AI vendors must sit on the material service provider register, with annual submissions to APRA. AI system failures cannot disrupt critical insurance services. Insurers that fail to demonstrate adequate risk management face supervisory action.
Build a CPS 230-aligned framework - 02Active
ASIC applies "efficiently, honestly and fairly" to AI.
ASIC has identified "major governance gaps where AI developments have outpaced the establishment of appropriate governance frameworks." Pricing algorithms must not discriminate on prohibited grounds. Claims handling must be fair, timely, and transparent. AI-driven product recommendations must satisfy design and distribution obligations. REP 798 catalogued 624 AI use cases across 23 licensees and found nearly half lack policies addressing consumer fairness or algorithmic bias.
Close the ASIC conduct gap - 03In force Mar 2025
FAR brought personal liability to insurer executives.
The Financial Accountability Regime, effective for insurers since March 2025, holds directors and senior executives personally accountable for AI governance failures. Penalties reach $1.565 million for individuals and $210 million for corporations. Accountable persons must take reasonable steps to ensure AI systems have appropriate oversight, effective risk management, and governance frameworks that address AI risks.
Map FAR accountability for AI - 04Dec 2026
Privacy Act 2024 reaches AI-driven insurance decisions.
The Privacy Act 2024 reforms, effective December 2026, require organisations to explain automated decisions that significantly affect individuals. For insurers, that covers claims determinations, pricing decisions, underwriting assessments, and fraud flagging. Privacy policies must disclose the kinds of personal information used, and policyholders need ways to challenge AI-influenced outcomes. The General Insurance Code of Practice and the Life Insurance Code of Practice add fair claims handling and complaint resolution requirements that AI processes must satisfy.
Prepare for the December 2026 deadline
Where AI is deployed and which regulator looks first.
Each AI use case carries a different risk profile. The governance posture must be proportional to the consequences for policyholders, regulators, and the AFCA dispute pipeline.
Tracks built for general, life, and health insurers.
Three tracks aligned to the insurance regulatory stack, scoped against the AI use cases that define the sector. Designed to integrate with actuarial oversight rather than sit beside it.
Track A
Governance & strategy
Operating models, committee charters, approval workflows, and board reporting designed around claims, pricing, underwriting, and fraud detection use cases.
Track B
Risk & assurance
CPS 230-aligned risk taxonomies, bias and proxy variable testing, independent review of pricing algorithms, and vendor management for insurtech AI providers.
Track C
Compliance & advisory
Privacy Act 2024 readiness, EU AI Act mapping for global insurers, AFCA-ready documentation, and standing advisory for the appointed actuary and risk committee.
Your claims AI and pricing algorithms need governance.
Start with the calculator for a baseline view of your AI risk exposure. From there we can map your AI inventory against APRA CPS 230, CPS 234, ASIC conduct obligations, the insurance codes of practice, and the Privacy Act 2024 reforms.