While artificial intelligence has been around for years, the launch of ChatGPT in late 2022 pushed the technology straight to the top of many business agendas. 

Today, Australian enterprises of all stripes and sizes are pondering the $64 million question: how best to utilise AI to their advantage?

From automating aspects of their operations to developing better documentation and reporting, AI is a transformative technology that can make running a small business easier and harder.

According to Steadfast Director of AI and Emerging Technology Steven Tuften, AI may also affect the type of insurance small businesses require and the ways in which insurers engage with them in the future.

Mitigating risks in real-time

For starters, AI-powered analytics will enable insurers to issue risk mitigation advice to individual customers as natural disasters are unfolding.

“A flood could be happening that an insurer can see will impact customers downstream three days later,” Tuften explains.

“They might issue a notice saying that if you can sandbag your property and move your assets off the ground floor, they’ll continue to cover your property for any losses. But if you don’t mitigate that risk, your cover is void.”

The good news is that being able to take that sort of interactive, in-the-moment approach could help insurers keep premiums affordable in the face of extreme weather events.

Smarter cyber-scammers

Meanwhile, AI has become a powerful tool for cyber-scammers seeking to deceive and defraud organisations.

Sophisticated deep fake attacks using AI-generated forgeries – think fake images, audio and video – are on the rise, and that’s a trend that’s likely to continue.

“Someone may pretend to be a supplier chasing a late payment, for example, and persuade your accounts person to make a remittance,” Tuften says.

“Many people know they’re being scammed when they’re sent links about traffic fines and the like, but a really good deep fake is much harder to detect – there’s research to suggest that up to 95 per cent of us don’t know how to identify an audio or video attack.”

Becoming more ‘AI-literate’ is a must for small business owners, if they’re to withstand this ongoing threat.

And cyber-insurance may help mitigate the costs, if they have the misfortune to fall victim, despite best efforts.

“Cover for this sort of liability will become increasingly popular for small businesses as owners become aware of the rising risk,” Tuften says.

Do you have the right cover?

Insurance helps safeguard your operations against unexpected and emerging risks. Your broker can help you determine whether your cover is keeping pace with the times. Contact your broker today to review your policies.

This article is of a general nature only and does not take into account your specific objectives, financial situation or needs. It is also not financial advice, nor complete, so please discuss the full details with your Steadfast insurance broker as to whether these types of insurance are appropriate for you. Deductibles, exclusions and limits apply. You should consider any relevant Target Market Determination and Product Disclosure Statement in deciding whether to buy or renew these types of insurance. Various insurers issue these types of insurance and cover can differ between insurers.

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