The Hayne royal commission and other reforms will put the insurance industry under “enormous” pressure as it seeks to maintain affordable pricing, Insurance Council of Australia (ICA) CEO Rob Whelan says.

“A balance must be struck that achieves the required reforms while maintaining industry viability,” he told the ICA Annual Forum in Sydney today.

“World’s best practice regulation will be of no avail if customers can’t afford to buy the products.”

The royal commission and other government initiatives are adding to the regulatory burden, while the increasing frequency and severity of natural disasters also has affordability implications, ICA says.

Mr Whelan warns the price of getting reforms wrong is high and a progressive approach should be used to reduce implementation risks and ensure sustainable outcomes.

He recommends that proposals be subject to regulatory impact statements, which have previously been used to examine market and industry ramifications.

“The process allowed industry a reasonable window of time to assess and comment on the draft legislation. Industry could evaluate its impact, including potential costs, and identify any unforeseen knock-on effects,” he said.

“If I have one piece of advice for all concerned it is to hasten slowly lest we repent at our leisure.”

Mr Whelan also says the status of the industry’s code of practice would become more complex and move from a voluntary to mandatory document under royal commission recommendations.

“There will be elements that will be subject to black letter law enforcement and others that will be more akin to a statement of ethical principles,” he said.

“Again, a balance needs to be struck here between the legal enforceability of code provisions and the living document we have today that responds to changing community needs.”

Mr Whelan presented his opening markets at a forum heavily focused on the outcomes from the royal commission, with panel discussion sessions examining the findings and implications for self-regulation.

“Some of us may be feeling somewhat battered and bruised by the whole experience and may think the process has been unfair and unjust,” he said.

“While understandable, these views should not impede the momentum for change. It is vitally important that the entire sector hears the clear message from the community that major reform is needed.”