APRA Warns AI Could Make Some Risks Harder to Insure
APRA member Suzanne Smith said AI-driven risk pricing could make some risks harder or more expensive to insure.
Updated on Nov. 9, 2026 in Insurance
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Suzanne Smith, who oversees general, life and private health insurance at APRA, warned the Insurance Council of Australia's annual conference in Sydney on Friday that AI-driven risk pricing could make some risks harder or more expensive to insure. Smith said policyholders and brokers would increasingly use AI to compare products and challenge decisions.
Why it matters
Greater segmentation could affect how broad, accessible and affordable insurance pools remain for Australian households. APRA has already found governance, risk management and operational resilience lagging behind AI adoption across the industry.
APRA's April letter to industry found governance, risk management, assurance and operational resilience were not keeping pace with AI adoption, but no quantified figures were published. Smith's speech set no compliance deadline and announced no new rules, leaving the scale of the pricing impact unresolved.
The players
Suzanne Smith
Suzanne Smith is an APRA member who oversees general, life and private health insurance supervision in Australia.
Insurance Council of Australia
The Insurance Council of Australia is the national industry body representing general insurers in Australia.
Andrew Hall
Andrew Hall is the chief executive of the Insurance Council of Australia, who has warned some Australian homes will never be affordably insurable.
The details
Smith said boards must know where AI is used, its material risks and who is accountable for it. She also warned that AI could add to insurers' costs through unreliable AI-generated advice, larger claims volumes, AI-generated legal arguments and new forms of fraud.
Timeline
April: APRA letter found governance lagging AI adoption across the industry.
6 November 2026: Smith delivered the speech at the Insurance Council of Australia's annual conference in Sydney.
Market Dynamics
APRA's April letter found insurers' governance and operational resilience were not keeping pace with AI adoption, and Smith's speech extends that warning to pricing. Sharper segmentation could shift the balance between affordable broad pools and costlier targeted cover.
Policyholders may find it harder to get cover for some risks as AI-driven pricing becomes more granular. Comparing products with AI tools could help households challenge decisions and seek better terms.
The takeaway
Households should review their policies regularly and compare cover before renewal, as AI-driven pricing may change what is offered and at what cost.
Further reading
Explore more on Insurance in Australia to see how these pricing changes could affect cover.
Source note: This article includes information reported by Insurance Business.
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