APRA has learned its lesson from the mess it made with HIH, but now it’s in a better shape to deal with the next HIH-type crisis in the future, says APRA CEO Graeme Thompson.

Speaking at a conference in Sydney, he said the collapse of HIH and its flow-on effects have been “cathartic events” for general insurers and APRA alike. He said if another HIH-type problem arises, the regulator is now in a much better state to deal with it.

“The regulatory system, broadly defined, for general insurers has been strengthened in many significant respects over the past two years,” he said. “We have new legislation, new prudential standards and we have enhanced APRA’s all-round supervisory capacities.”

Mr Thompson said he was also encouraged by the insurance industry’s own increased awareness of the need for higher standards. “As a result of all of these factors the industry is more robust, more attuned to risk and its proper pricing, and generally better managed than ever before.”