Technology is playing a growing role in how insurers deal with claims from natural catastrophes. According to the Insurance Council of Australia (ICA), even before ex-Tropical Cyclone Alfred struck, insurers were able to pre-emptively contact a quarter of a million customers across southeast Queensland and northern New South Wales “with safety and preparedness tips and how to lodge a claim as quickly as possible.” As the recovery continues, technology is helping insurance firms expedite simple claims and focus on more complex cases.
The upcoming Claims Leaders Summit in Sydney will focus on the challenges and opportunities presented by new tech in the claims area. ControlExpert, a Solvd group Company, is sponsoring a workshop. The firm specialises in digitising and speeding up manual processes for insurance firms.
Given the sheer volume of claims from nat cats like ex-TC Alfred, Insurance Business asked Rachael Reynolds (pictured), how much can new technology really help insurers?
Reynolds, ControlExpert’s head of business development and client management, said technology can play a key role addressing these challenges.
“It’s devastating to witness the impact of natural disasters, especially during a time when many Australians are already facing cost-of-living pressures,” she said. “In the aftermath of such events, insurers often struggle with the sheer volume of claims, leading to delays, higher operational costs and challenges in providing timely support to policyholders.”
Reynolds painted a picture of the range of ways technology is being used by some insurers at different stages of a post-nat cat claims process.
“By leveraging AI and machine learning, insurers can automate initial claims processing tasks, such as data collection, damage assessment and claim validation, which helps reduce processing times and operational costs during periods of high claim volumes,” she said. “Additionally, user-friendly mobile apps and online platforms enable policyholders to easily report damages, upload documentation, and track claims status, improving customer satisfaction and lightening the load on claims adjusters.”
Data analytics, said Reynolds, is also helping insurers allocate resources more efficiently by identifying areas with the highest claim frequencies.
This pressures from nat cats “in particular”, she said, is driving up operational costs and requiring significant change management across the industry.
Customers are also getting more demanding.
“While automation and technology have streamlined claims processing, customers now expect faster, more transparent and user-friendly experiences,” she said. “Insurers must adopt digital-first or digital-only claims processing, ensuring it remains accurate and prevents fraud.”
This approach, said Reynolds, isn't about replacing insurance experts but enabling them to work alongside technology to make the claims process easier and faster for customers.
In Australia, Reynolds said, generally speaking, insurance firms have made decent progress adopting technology led improvements in their claims processes.
“The introduction of AI-powered chatbots, digital and self-service first notification of loss and AI-driven fraud detection has improved claims processing efficiency and enhanced the overall customer experience in Australia,” she said. “The use of telematics is also growing with some insurers offering 'pay-per-KM' policies.”
However, she said insurance firms in the US, Canada, the UK and some countries in Europe, are more advanced.
“Particularly in areas like cost prediction, processing speed and real-time policy personalization,” said Reynolds. “For instance, insurers in the UK and US are leading the way in using blockchain technology for claims, especially in commercial insurance and reinsurance, while Australia is still in the experimental phase with blockchain.”
Locally, she said, there remains a gap compared to international leaders in adopting cutting-edge technologies for claims processing.
Meanwhile, regulatory changes are increasing the pressure to close this gap.
“A key example is the 2021 revisions to the General Insurance Code of Practice by the ICA, which introduced stronger requirements for insurers to manage claims fairly, promptly, and transparently,” said Reynolds. “The revised code includes clearer provisions on how insurers should treat vulnerable customers and mandates that claim decisions be made within 10 days, along with improved communication with customers.”
These changes, she said, are pushing insurers towards a more customer-centric approach and compelling them to modernize their claims processes.
