IAG drives AI more deeply across its operations

Insurance Australia Group (IAG) is utilising three distinct methods to embed artificial intelligence across its operations, with 92 production instances of generative AI so far to show for it.

The insurer - home to brands such as NRMA, RACV and RACQ - used its investor day on Tuesday to provide a detailed update of its core transformation and opportunities to build on that foundation.

The three methods that IAG is using to bring AI into its operations are called deploy, shape and compose, according to CEO and managing director Nick Hawkins.

Under ‘deploy’, IAG is relying on AI being incorporated into platforms and vendor ecosystems it uses such as Microsoft, Google, Guidewire, Earnix, and ServiceNow. About 60 percent of IAG’s workforce encounter AI tools in this way.

Meanwhile, ‘shape’ relies on a growing team of “activators” - certified personnel - to tailor AI to “specific business problems and use cases,” Hawkins said.

“We now have more than 600 ‘activators’ and have already published something like 92 AI agents that are improving workflows across areas like customer service, operations, and across some of our corporate functions.”

The number of ‘activators’ across IAG has quadrupled since late 2024.

The final method IAG is relying on is ‘compose’, where it is “building high-value, more complex AI solutions at scale.”

“Right now, we have more than 2000 of our people that are using ‘composed’ AI in their everyday business, in our claims and fraud and some of our service teams,” Hawkins said.

“These are delivering transformational change in the way we are running and operating IAG.”

Chief operating officer Neil Morgan said that the opportunities that AI could create for IAG also fell into three key areas.

“The first opportunity is to target specific areas of the value chain, [such as the] use of AI in our intermediated division to support quote ingestion and claims lodgement, [or] in retail, [where] the claims assessment phase in CTP [compulsory third party insurance] has been a key value area to target,” Morgan said.

“Second, there are opportunities wherever we can enable the scaled workforce, from front office to back office, by giving them consistent advanced tools to serve customers better. 

“And third, empowered AI has been amazing to see come to life. We have use case deployments across the entire business through providing people with tools and skills.”

Morgan said the number of generative AI use cases in production - 92 in two years - demonstrated the potential for the technology to transform the insurance business.

“We’ve gone from zero production GenAI use cases two years ago to 92 today, and they are not pilots. They are in production,” Morgan said.

Morgan indicated that IAG is already looking to agentic AI as a new frontier in its embrace of AI technology more broadly.

“There is - rightly - a lot of commentary about agentic commerce. For us, agentic is about faster, more accurate customer journeys where multi-step work can be orchestrated, within guardrails and controls of course, and with human oversight as required,” Morgan said.

“Specifically on agentic commerce, to us, just like online and mobile apps, it’s another channel to market, and I think it’s an attractive one, because generative AI tools can synthesise full service information, not just compare pricing. 

“That plays to transparency of customer satisfaction, of coverage quality, and claims experience - the areas where leading brands win.”

Hawkins said that, like other brands, IAG is keen to have a greater presence inside of AI tools where customers increasingly do their research.

Morgan said that “creating the conditions where our customers and our people can fully benefit from emerging technology including AI” was - and still is - one of his “obsessions”.

He added that IAG is “not approaching this as swapping humans for tokens.

“We benchmark widely and globally,” Morgan said. “The aim here is experience uplift, speed and accuracy.