The Insurance Council of Australia (ICA) has provided its official response to the Productivity Commission’s Interim Report on Harnessing Data and Digital Technology, detailing the general insurance industry’s stance on regulatory and technological developments.
The ICA’s submission addressed the growing use of artificial intelligence (AI) within the insurance sector. It noted that AI is already being implemented to address operational inefficiencies, manage risk, and improve productivity.
The ICA stated that AI adoption has the potential to streamline processes and enhance customer interactions, but cautioned that regulatory uncertainty could impede further progress.
“An uncertain or overbearing regulatory environment will pose a significant challenge to AI deployment and use, limiting benefits delivered to customers,” it said.
The council encouraged policymakers to utilise existing regulatory frameworks where feasible, rather than introducing new layers of oversight.
The ICA also commented on the proposal to extend the Consumer Data Right (CDR) to general insurance.
While supporting the principle of consumer access to data, the council identified unique challenges for the sector.
General insurance data, the ICA explained, is often based on risk assessments and commercially sensitive information, making it less amenable to standardization or interoperability across different insurers.
The ICA maintained that any new data access pathway should be justified by clear evidence of consumer benefit and productivity gains.
The council emphasised that insurers already comply with multiple regulations governing information management and consumer access to personal data.
On privacy matters, the ICA expressed support for outcomes-based regulation and endorsed the commission’s recommendation to introduce a compliance defence pathway.
The council argued that such a mechanism should serve as a safeguard for compliance, rather than an additional legislative burden.
The ICA also agreed with the recommendation against introducing a right to erasure and called for a review of other privacy reform proposals to ensure they align with non-prescriptive, outcome-focused regulation.
The ICA acknowledged the potential benefits of digital financial reporting, particularly in leveraging new technologies such as AI.
However, the council pointed out that general insurers are already subject to ASIC’s Financial Reporting Taxonomy and warned that any move toward mandatory digital reporting would require adequate lead time due to the complexity of current regulatory reforms and the need for system upgrades.
The ICA’s submission forms part of a broader strategy to address the Productivity Commission’s interim recommendations and advocate for targeted reforms that enhance industry efficiency and resilience.
The council indicated its intention to continue engaging with the commission as the process advances toward a final report.
