Australia’s insurance sector is at a crossroads. Rising climate risk, digital disruption and changing customer expectations are reshaping the industry faster than ever. The way forward isn’t just about keeping up – it’s about reimagining what’s possible. Our landmark Value in Motion study recently highlighted a simple truth – value is shifting fast, across sector and industry boundaries. Insurers who act now, using AI, cloud and data, will capture that value as it moves.
This is where the Alliance between PwC and Microsoft comes in. Our combined strengths: strategic foresight, industry expertise and cutting-edge AI capability help insurers turn this ambition into action. Together, we are helping insurers embed AI into the heart of their business, shifting from disconnected processes to intelligent, connected operations.
This article explores how AI can tackle existing issues, how forward-thinking insurers are already delivering impact, the size of the opportunity and how the PwC Microsoft Alliance can help you seize it.
Tackling challenges traditional models can’t solve
The Future of Insurance in Australia is our blueprint for navigating a market shaped by disruption. Microsoft’s AI capabilities bring this blueprint to life, not as a set of ideas, but as tangible solutions to real industry problems.
“Australia’s insurers recognise the opportunity that Generative AI represents. The past two years has demonstrated the opportunity has advanced far beyond a personal assistant helping to catch up, draft and summarize meetings to powerful business tools that can transform operations and change the very shape of work. This technology will transform the way we experience insurance in the moments that matter. To take advantage of the ‘intelligence on tap’ paradigm shift, a strong AI strategic agenda combined with AI literacy is tablestakes. The PwC Australia & Microsoft Alliance is one uniquely positioned to accelerate from promise to value realisation to fuel growth and reimagined customer experiences – responsibly”.
Together, we’re helping insurers tackle challenges that traditional models can’t solve, including:
- Legacy system constraints – unlocking data trapped in disconnected systems to drive smarter decision-making.
- Operational inefficiency – automating manual, repetitive tasks in claims, underwriting and customer service.
- Customer expectation gaps – delivering seamless, personalised experiences across channels with predictive insights, enhancing customer intimacy as a market differentiator.
- Climate risk and compliance pressures – enabling faster, data-driven responses during natural disasters – a necessity highlighted by the systemic delays revealed by ASIC during the 2022 floods. Microsoft’s AI models also ensure regulatory alignment.
PwC x TED partnership
At PwC’s recent AI Unbound event, featuring TED in Sydney, Scott Likens, PwC’s Global AI Chief Engineer, outlined how the next wave of insurance transformation will be powered by AI systems that go far beyond traditional process automation. These systems are evolving into autonomous agents capable of reasoning, planning, and acting independently streamlining claims and underwriting, enhancing decision-making, and significantly improving speed and accuracy across the value chain. He also highlighted AI’s advanced capabilities in fraud detection through complex pattern recognition across vast datasets, far surpassing conventional methods. Crucially, he underscored the importance of responsible AI, emphasising ethical compliance, regulatory alignment, and the foundational role of data readiness in successful deployment.
By tackling these issues and embedding AI directly into critical processes, insurers are shifting from reactive to proactive, moving at the speed customers and regulators now expect. These challenges are already being addressed by forward-thinking insurers through AI-driven solutions.
AI in action – use cases driving real impact
Across the insurance sector, early adopters of AI are already transforming how they operate, delivering faster service, improving decision-making, and managing risk more effectively. AI and automation are not just enhancing efficiency and accuracy; they are fundamentally reshaping underwriting, claims processing, and customer service.
By processing vast volumes of data, automating repetitive tasks, and enabling personalised experiences, these technologies are driving operational transformation and elevating customer satisfaction. This shift goes beyond a simple tech upgrade, it marks a redefinition of how insurers work and engage with their clients.
- Faster claims processing – Insurers are using Azure AI to automate key steps in claims. AI streamlines the entire claims workflow, from initial report to final settlement. Repetitive tasks like data entry and document classification are automated, speeding up resolution times. AI-based systems extract key details from documents and analyse unstructured data like police reports and medical bills using OCR and NLP.
- Smarter underwriting – AI algorithms analyse numerous data points to improve risk assessment accuracy. For example, underwriting decision times for standard policies have dropped from days to minutes, while maintaining high accuracy. AI also helps detect potentially fraudulent coverage requests and supports fair practices by identifying and eliminating bias in training data.
- Enhanced customer service – AI-powered systems provide continuous support through chatbots and virtual assistants, handling routine inquiries and claims in real-time. Voice recognition and personalised communication improve customer interactions and satisfaction.
The moment to lead is now
The opportunity is huge. Over 40% of the AUD $11 trillion in global value expected to shift by 2025 will come from Asia Pacific, driven by AI, productivity gains and decarbonisation. Similarly, our 2025 Global AI Jobs Barometer revealed that industries most exposed to AI are experiencing three times higher revenue growth per employee.
To seize that future value, Australia’s insurers need to embrace disruption and lead - today.
With PwC’s strategic foresight and Microsoft’s AI capability, insurers can accelerate transformation, drive customer value and lead the next era of growth and perhaps become a ‘Frontier Firm’ an entirely new type of AI-enhanced organisation envisioned by Microsoft.
“Australia’s insurance industry is at the cusp of unprecedented transformation – driven by digital disruption and evolving customer expectations. Through our Alliance with Microsoft, combining Generative AI and cloud capabilities, PwC Australia is uniquely positioned to help insurers redefine how they operate, accelerate innovation and lead with resilience.”
Contact us
PwC Microsoft Alliance Australia
PwC can help you rethink, reshape, and realise tangible value at a pace powered by an ecosystem of Microsoft technologies, strategy, and industry experts.
The future of insurance in Australia
Navigating change and seizing opportunities