APRA’s thinking on niche insurers questioned
Senior brokers have questioned the rationale behind the licensing of niche insurers in the Australian market, with the Australian Prudential Regulation Authority (APRA) saying it makes decisions on a “case-by-case” basis.
APRA recently approved an application from Auckland-based Pacific International to underwrite general insurance business in Australia. It is also considering applications from other niche insurers.
Pacific International is the principal underwriter for Newcastle specialist broker Rapid Solutions, which established the underwriting operation in NZ after failing to source cover in Australia after the HIH collapse. It was forced to apply to APRA due to the new direct offshore foreign insurer (DOFI) legislation.
The senior brokers – none of whom wished to be identified – have contacted insuranceNEWS.com.au to question APRA’s rationale behind authorising small niche insurers. One said there will always be concerns around the place in the market of insurers with “limited and concentrated portfolios”.
An APRA spokesman declined to comment to insuranceNEWS.com.au on individual cases, but said the regulator uses a robust application process that is “applied equally to insurers on a case-by-case basis outlined by guidelines which are readily available on our website”.
Another DOFI to gain registration is Aspen Insurance UK, which will trade from a Sydney office under the name Aspen Insurance UK Limited – Australia Branch.
Three insurers have been granted an exemption to continue operating in Australia until April 1 while their applications are assessed. They are marine specialist TT Club Mutual Insurance; Stockholm-based reinsurer Sirius International Insurance – part of the giant US White Mountains Group; and NZ-based credit insurer Contractors Bonding Limited. NZ life insurer Sovereign, owned by the Auckland Savings Bank, has been given an exemption until May 1.
APRA recently approved an application from Auckland-based Pacific International to underwrite general insurance business in Australia. It is also considering applications from other niche insurers.
Pacific International is the principal underwriter for Newcastle specialist broker Rapid Solutions, which established the underwriting operation in NZ after failing to source cover in Australia after the HIH collapse. It was forced to apply to APRA due to the new direct offshore foreign insurer (DOFI) legislation.
The senior brokers – none of whom wished to be identified – have contacted insuranceNEWS.com.au to question APRA’s rationale behind authorising small niche insurers. One said there will always be concerns around the place in the market of insurers with “limited and concentrated portfolios”.
An APRA spokesman declined to comment to insuranceNEWS.com.au on individual cases, but said the regulator uses a robust application process that is “applied equally to insurers on a case-by-case basis outlined by guidelines which are readily available on our website”.
Another DOFI to gain registration is Aspen Insurance UK, which will trade from a Sydney office under the name Aspen Insurance UK Limited – Australia Branch.
Three insurers have been granted an exemption to continue operating in Australia until April 1 while their applications are assessed. They are marine specialist TT Club Mutual Insurance; Stockholm-based reinsurer Sirius International Insurance – part of the giant US White Mountains Group; and NZ-based credit insurer Contractors Bonding Limited. NZ life insurer Sovereign, owned by the Auckland Savings Bank, has been given an exemption until May 1.