Australian Prudential Regulation Authority Chairman Wayne Byres has flagged long-term changes in the financial sector as more life insurers are sold into foreign ownership.

The life industry may be “almost fully foreign-owned” within the next five years if the current trend continues, he told the Senate Economics Legislation Committee last week.

“In raising this issue of changing ownership, I don’t want to be seen to suggest such an outcome would necessarily be problematic from a prudential perspective,” he said.

“I raise it simply as a reminder that, with so much focus on the here and now, the important trends that shape the financial system we’ll have in the future can sometimes go largely unnoticed.”

Commonwealth Bank is the latest financial institution to put its life business up for sale. ANZ is still seeking a buyer for its life arm, while Suncorp is weighing up Asteron’s future.

NAB has already sold its MLC life business to Nippon, while Dai-ichi bought TAL a few years ago.

“The new foreign owners are typically specialist life insurers, with deep sources of capital and longer time horizons aligned to the insurance cycle,” Mr Byres said.

“To the extent there are challenges, they come from managing the comparability of regulatory regimes for the parent companies and ability to engage with senior executives and owners of the Australian business.”