The latest Vero SME Insurance Index offers brokers a timely read on how small and medium-sized businesses are approaching artificial intelligence (AI): with interest, some caution and a clear preference for human oversight when the stakes are high.
The headline numbers in the SME Index are telling. About a third of businesses surveyed for the report are exploring AI, while only 8% are actively implementing it. Adoption is far lower among micro businesses than among large firms. That points to an emerging divide not only in technology uptake but in confidence, capability and risk awareness. Many SMEs can see AI’s promise but are still working out where it fits, what it may expose them to and how much they should rely on it.
This adoption pattern is not uniquely Australian. The New Zealand government says an AI gap is opening there too: a 2024 survey found 68% of SMEs had no plans to evaluate or invest in AI technology, while larger businesses were moving faster. Brokers on both sides of the Tasman have a similar advisory challenge: clients are interested in AI but many are still at an early stage of understanding its uses and risks.
The broker opportunity is not to evangelise about AI but to help clients understand its practical uses. The SME Index report found that businesses are broadly comfortable with brokers and insurers using AI when it makes things faster, easier and safer but are less comfortable when it moves into areas where judgment, explanation, empathy or negotiation are expected.
For example, there is relatively little resistance to AI being used to alert brokers and insurers to risks, or to support administrative parts of the insurance process. By contrast, discomfort rises around chatbots answering questions about policies, renewals and claims, and rises further when AI is framed as deciding claim outcomes. Businesses appear willing to accept automation as a tool, but not as a substitute for accountability.
“People make our industry what it is and we would never want to remove the human touch from those complex areas or from the areas where the relationship comes to the fore,” said Laura Broughton (pictured left), Vero’s head of platform business, during an analysis of the report.
AI technology may be able to improve workflow, reduce friction and speed up information handling but the value of a broker has never rested only on efficiency. It rests on helping clients navigate uncertainty, especially when that uncertainty carries financial, operational or reputational consequences. AI may sharpen that need rather than reduce it.
The Vero report helps identify where SMEs are comfortable with AI being deployed and under what conditions, which helps brokers embark on a grounded conversation with clients.
AI assisting with processing information, identifying patterns, surfacing risk signals and reducing administrative burden are likely all areas where clients may see a benefit. But once the discussion moves to claims decisions, policy interpretation or sensitive customer interactions, the expectation shifts. Clients want to know who is making the decision, how it is being made and whether a person remains responsible for the outcome.
“There needs to be complete transparency around where we are using it and how we are articulating that to customers,” Josh Hamill (pictured centre), general manager of broking and risk services for Insurance Advisernet.
That has ethical and commercial implications. Brokers sit in a position of trust and trust is hard to maintain if clients are unclear about where automation begins and human judgment ends. AI transparency is not just about disclosure for its own sake. It is about ensuring clients understand the process, the limits of the technology and the role their broker continues to play.
“The broker is the fiduciary, the trusted partner, and you can’t outsource that,” said NIBA CEO Richard Klipin (pictured right).
The findings also suggest a broader opening for brokers as risk advisers. The report found that some businesses remain uncertain about AI’s accuracy, data security and wider application. Those concerns do not sit neatly in one insurance box. They touch cyber exposure, governance, reputation, business continuity and professional risk. For brokers, that broadens the discussion beyond whether AI can make an office more efficient and becomes a conversation about how AI changes a client’s risk profile and what should be done about it.
