APRA outlines insurance focus areas in corporate plan
The Australian Prudential Regulation Authority (APRA) released today its Corporate Plan for 2022/23, covering its focus areas in the four-year period to 2025/26 including for insurance.
The Corporate Plan says the general insurance industry remains well capitalised despite the impact of significant weather events but notes there are increasing challenges with sourcing insurance for certain risks and ongoing pressure on margins from rising reinsurance and operating costs.
“Given their lack of access to affordable insurance cover, sections of the Australian community are financially exposed to adverse events,” the Corporate Plan says. “APRA continues to engage a broad range of stakeholders and provide specialist advice and support on access and affordability issues, including the Cyclone Reinsurance Pool.
“The regulator’s process in the event of further natural catastrophes is to establish a coordination group to monitor and assess impacts, to ensure effective engagement with industry and other agencies and to guide any appropriate regulatory response.”
The Corporate Plan says supply chain disruptions, skills shortages, inflationary pressures and cyber risks are posing challenges within the general insurance sector.
APRA’s general insurance priorities are strengthening governance, risk management and business strategy practices, including addressing deficiencies identified in self-assessments undertaken by the industry, the Corporate Plan says.
The regulator will maintain focus on promoting the sustainability of insurance products for the long-term benefit of consumers, including heightened attention on specific business lines where needed.
APRA Chairman Wayne Byres says despite the economic challenges of the past two years, Australia’s financial system remains stable and resilient.
“However, we cannot afford to be complacent,” he said. “Global economic conditions are forecast to deteriorate over the period ahead, exacerbated by the ongoing war in Ukraine, while the increases in cost of living and recent flooding events remind us that Australia is facing its own turbulence.
“As Australia’s prudential supervisor, APRA wants to see banks, insurers and superannuation trustees retain their financial and operational strength.”
He says the latest Corporate Plan will “help us achieve these objectives by focusing on delivering our existing strategic priorities whilst keeping a watchful eye on changes in our operating environment and responding as needed”.
Click here for the plan.
