The Australian Prudential Regulation Authority (APRA) has warned the economic fallout from the coronavirus crisis will continue to pose material risks to the financial services sector including insurance.

Chairman Wayne Byrnes told the Senate Economics Legislation Committee in an estimates hearing last week the prudential regulator continues to keep a close eye on the situation.

“The health crisis brought with it an economic crisis and subsequent economic contraction that has been more severe than anything seen since the Great Depression,” Mr Byres said.

“This had, and will continue to have, a material and ongoing impact on all of the industries that APRA oversees.

“Looking ahead, the immediate challenge of maintaining financial and operational resilience during a period of considerable stress and disruption remains front and centre for APRA.”

While the financial services sector has responded well to the pandemic crisis, Mr Byres cautioned there were still many challenges ahead.

He provided the committee with an update on APRA’s strategies for the industries under its watch, including for general insurance.

The attachments provided to the committee say APRA is focused on improving insurance outcomes for consumers by ensuring “a more resilient, stable, efficient and competitive” market.

APRA is undertaking planning to improve and embed recovery plans and resolution options across the sector. The plan will be enacted some time next year.