APRA chair highlights insurance affordability 'urgency'

APRA chair highlights insurance affordability ‘urgency’

20 February 2023

The Australia Prudential Regulation Authority (APRA) has reiterated it remains focused on addressing insurance affordability and other related challenges at a Senate hearing.

“The urgency of this work in general insurance is brought into sharp focus with each severe weather event affecting an Australian community,” Chair John Lonsdale said in his opening statement to the Senate Economics Legislation Committee last week.

“The problems are complex and solutions will be multi-faceted requiring a collaborative approach across industry, regulators, government and consumers.”

He says the regulator’s engagement on climate change with industry and authorities both in Australia and internationally will also remain a key focus.

“Late last year, we released the findings of the first Climate Vulnerability Assessment, which assessed the potential future financial impacts of climate change to help banks, insurers and superannuation trustees better understand and manage these risks.

“Last year’s assessment focused on the banks; this year, we intend to focus on the insurance sector.”

Earlier this month APRA released its Supervision Priorities Information Paper for 2023, targeting insurance affordability and availability issues as well as cyber resilience and climate risks.

The paper says ongoing natural disasters have “compounded” the difficulty of access to affordable general insurance for homeowners and businesses in areas more vulnerable to severe weather events and pressure on some commercial lines, such as public liability, also continues.