IAG invests in Sonder to bring early intervention and immediate care to customers

Our Resilient Futures Report draws on insights from consumers and small businesses to provide a view of Australians’ confidence, outlook and exposure to disruption.

It includes a Risk Index designed to contribute to the national conversation on resilience. By tracking sentiment, preparedness, and confidence, we will build an evidence base to inform public discussion.

We’re encouraged to see that while cost-of-living pressures are the dominant concern, the headline outcome is that Australians remain cautiously optimistic, with the majority expressing confidence in our nation’s future.

But behind that, there’s a lot going on. Our report shows Australians are also navigating a growing mix of challenges – from cyber threats and mental wellbeing pressures to personal safety concerns and extreme weather events.

We found that 67% of consumers and 64% of SMEs experienced a significant disruption in the past year, meaning risk events are no longer a distant or occasional concern.

Risk awareness extends to climate, with one in two Australians factoring climate risk into decisions about where they live and work; this number rises to almost 75% among Gen Z.

Consumer resilience shows clear regional divides, with sentiment, confidence and anxiety varying significantly across states.

NSW consumers are among the most positive at 62%, versus 58% nationally. WA shows similarly strong resilience at 60%.

Queensland has emerged as our nation’s most weather-ready state, with 70% of residents reporting they are likely to prepare for natural disasters and unexpected risks, well ahead of NSW at 64%, Victoria at 60% and Western Australia at 59%.

We look forward to sharing more details from our Report and Index after its launch tomorrow.

We all know that quality collaboration between insurers, regulators and governments is critical if we are to create a resilient Australia for the long term.

At IAG, we welcomed the Federal Government’s increased focus on mitigation and resilience funding – but this is a problem that requires ongoing commitment and increased investment over time. Risk is on, and we must get ahead of it if we want to keep Australia safe.

This is even more critical given we are moving into an El Niño weather pattern, signalling rising temperatures and an increased risk of bushfires in the months ahead.

Working on these challenges together in forums such as this allows us to tackle underlying risks and manage their impact when they do occur.

Forums and discussions like today are important steps to helping ensure we don’t reach a breakpoint in our nation’s capacity to be resilient.

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Thanks James – it’s great to be back with you and the AFR team for today’s Insurance Summit.

I would like to begin by also acknowledging the traditional owners of the land we’re meeting on here in Sydney, the Gadigal people of the Eora Nation. And I pay my respects to their elders, past, present and emerging.

As Chief Executive of Australia’s leading insurer, IAG, it’s an honour to welcome you all to this important conversation.

Welcome also to the panellists and speakers joining us today, including Dr Daniel Mulino, Assistant Treasurer of Australia and Minister for Financial Services.

Dr Mulino, your knowledge of our sector’s history, community impact, challenges and opportunities is invaluable to our industry, and to the customers and communities we serve.

Today’s theme focuses on Resilience, and its importance to Australia’s future.

Since 2020, Australia has had 17 declared catastrophes and 13 significant weather events. That’s $23 billion in insured costs, and a 92 percent increase on the previous five years.

This upward trend brings significant challenges to our people, businesses and communities – both physically and psychologically. It also threatens critical infrastructure.

And the risk itself is increasing; climate change is driving more frequent, severe and geographically widespread extreme weather, with many natural hazards worsening and exposing more communities to damage and loss.

The third edition of IAG’s Severe Weather in a Changing Climate report, released last November, flags that many natural hazards are worsening in a warming climate.

For Australia, that means:

Rapid escalation of short-duration intense rainfall and flash flooding, and fire weather risks

Increasing risk of large-to-giant hailstones over the most populated regions of the southern parts of Australia – we saw this last November in South East Queensland.

Rising tropical cyclone risks in southwest WA, southeast QLD and northern NSW, and

Sea-level rises around Australia accelerating at a rate close to the high-emissions scenario.

Clearly, we are not an industry facing falling demand for our products and essential services. On the contrary, demand for what we do is growing.

Along with that growth comes an increasing responsibility to ensure customer outcomes are consistently delivered, and consumer protections keep pace. We’ll hear more on this today from our two most important regulators – and I’d like to extend a warm welcome to our ASIC Commissioner, Alan Kirkland, and APRA Executive Board member, Suzanne Smith.

Our focus on customers is driving us – and others in the industry – to work with the Insurance Council of Australia to review the General Insurance Code of Practice. A new code is being finalised at the moment with input from customer advocates, many of whom are here today and participating in a panel this afternoon.

Importantly, we are also applying a customer lens to how we deploy AI.

AI is fundamentally improving how we understand and manage risk, and how we service customers. But it must be done in ways that strengthen, not erode, consumer trust.

There was a lot of discussion on this at the AFR’s 3rd AI Summit earlier this month.

We want AI to support fair, explainable and consistent outcomes aligned with community expectations and regulatory standards.

The ethical use of AI is now at the forefront of global and local discussions. We had a head start on this thinking when IAG co-founded the Gradient Institute with CSIRO and the University of Sydney in 2019. That organisation’s dedication to ensuring artificial intelligence is developed and used safely, ethically, and for public benefit, was ahead of its time.

Its work helps inform how we embed and use AI. Our Retail Insurance Australia Chief Executive, Julie Batch, who is sitting on a panel later this morning, will talk more about how we are bringing this to life in our business.

Returning to the theme of Resilience, this is a subject IAG has recently invested in understanding in more depth, and I’m happy to share some of those findings with you today.

Recognising that resilience has always been an Australian characteristic, we wanted to improve our “soft” data on how Australians think and feel about resilience and risk – this complements the “hard” perils and customer behaviour data which is so beneficial for us to understand and share.