ASIC, APRA list insurance focus areas in corporate plans
The Australian and Securities Investments Commission (ASIC) and the Australian Prudential Regulation Authority (APRA) have outlined areas in insurance they intend to focus on between now and 2024, taking into account the long-term impacts of COVID-19.
The action areas were contained in the respective Corporate Plan 2020-24 released today by the two regulators.
APRA’s corporate plan says it will continue to focus on key risk areas including capital and the sustainability of insurance products.
The prudential regulator says the industry has incurred a “particularly severe level” of claims arising from a series of natural disasters before the pandemic erupted, adding more strain on the industry.
“Whilst the events so far have impacted earnings rather than capital, there remains significant future risk of decreased business volumes, increased claims activity and more expensive reinsurance,” APRA said.
“The ultimate claims impact of COVID-19 is likely to remain uncertain for some time given the prospect of litigation across multiple classes of business (most prominently in business interruption insurance) and with further potential concerns arising in regard to the future availability and affordability of particular classes of insurance more broadly.
“However, in the face of these challenges, the general insurance industry continues to be resilient and well capitalised.”
In ASIC’s corporate plan, the regulator says a significant portion of its work in the near term would be focused on addressing the impact of the pandemic on businesses and consumers.
It will work to ensure insurance claims are processed efficiently and with utmost good faith. Additionally it will monitor claims processes and outcomes to protect consumers from being treated unfairly because of COVID-19.
ASIC intends to also focus on mis-selling, analysing the risk of inappropriate product and design in the current environment. It aims to achieve this by monitoring the design and sale of poor-value insurance products and the use of potentially unfair contract terms.
The corporate regulator says Warren Day, formerly Executive Director Assessment and Intelligence, has transitioned to the role of Chief Operating Officer and Zack Gurdon has been appointed to take up the newly established role of Chief Risk Officer.