IAG Utilises AI to Transform Vehicle Damage Assessments and Expedite Claims

Australia’s largest general insurance company, IAG, has developed an AI-driven system aimed at streamlining the claims process for motor vehicle accidents. This technology has reduced the time it takes to assess ‘total loss’ claims from weeks to just a few days, providing faster outcomes for customers.

A Shift in Claims Processing

Using advanced machine learning technology, the in-house-developed system predicts with over 90% accuracy whether a vehicle is a total loss following an accident. By reducing reliance on traditional assessment methods, such as towing vehicles to garages, IAG has significantly shortened claims processing times.

Hannah Sakai, Director of Analytics, described the motivation behind the development as focused on improving the customer experience:

“A car accident can be a traumatic and challenging time for our customers, so we turned to artificial intelligence to help improve this experience. Our predictive total loss solution provides clarity and certainty, helping to reduce the emotional impact of an accident.”

The system collects information from customers when they file a claim, delivering quicker results and a streamlined process for policyholders.

Balancing Efficiency and Industry Impact

While this innovation provides faster processing and greater transparency for customers, it represents a shift in how claims are managed, which may have implications for repairers. The reduced need for in-person assessments could impact traditional workflows, prompting the industry to adapt to new processes introduced by AI-driven tools.

Customer-Focused Transparency

The platform has also improved communication with customers. After filing a claim, policyholders receive a text message the following day with the total loss prediction and guidance on next steps.

Sakai noted:

“Providing transparency upfront has made a significant difference. Customers feel more informed and confident, leading to higher advocacy rates across IAG brands, including NRMA Insurance, SGIC, and SGIO.”

AI Innovation with Ethical Considerations

IAG’s system is among the first to undergo evaluation under Australia’s voluntary AI ethics principles, designed to minimise risks and ensure responsible technology use. These principles form part of the national AI ethics framework, which promotes transparency and fairness in AI adoption.

AI’s Expanding Role in Insurance

IAG’s platform highlights the increasing influence of AI in the insurance sector. While these technologies offer opportunities to improve efficiency and customer experience, they may also pose challenges for other stakeholders in the industry. As AI adoption grows, balancing innovation with the needs of all parties will remain a critical consideration.

By integrating AI into its operations, IAG has introduced new efficiencies while also raising important discussions about the broader impact of these changes on the industry.