The COVID-19 outbreak has compressed a decades’ change into a few years and will lead to lasting impacts on the ways insurers do business, Australian Prudential Regulation Authority (APRA) Executive Board Member Geoff Summerhayes says in comments made as his term concludes.

“The community’s risk appetite has changed,” Mr Summerhayes says. “I don’t think you can have societal change like we’re having right now and then only offer the same products, services and customer solutions that were being offered in 2019.”

People are interacting in a different way and firms will be looking at the business opportunities that can flow from that and how they can be insured and packaged as they think about their commercial viability into the future.

“As a regulator we tend to focus on risk, but there’s as much opportunity here as there is risk,” he says in a conversation released on the APRA website. “The challenge for businesses and regulators is to adapt.”

COVID has driven two megatrends, the rapid expansion of digitisation of the economy and the importance of customer connection, and Mr Summerhayes expects both will drive the evolution of regulated entities and will be areas where APRA will need to pay close attention.

“Businesses that are digitally enabled and customer connected have done better, regardless of industry,” he says. “Those businesses have been able to pivot their business models, distribution channels, products and services, and they’ve done it quickly so they can remain viable, and in some cases, they’ve really thrived.”

Mr Summerhayes, who has overseen general insurance and the life and health sectors, will leave APRA when his five-year term concludes at the end of this month. Previously he was Suncorp Life CEO.

During his term he has also raised the profile of climate-related risks through speeches and work with regulatory forums.

“I think we’ve made a huge impact on the Australian regulatory landscape and done a lot internationally,” he says. “There’s been a paradigm shift in awareness, and increasingly, action, in the last four years.”

Mr Summerhayes says he learned a lot about working with customers and creating positive experiences in a previous working life, and the lessons apply to financial services.

“When I finished university, much to my parents’ horror, I started running nightclubs,” he says.

“I actually learned some really valuable lessons there, and it’s still how I think as a leader. If you’re running a team, or running an organisation, you’re actually creating a set of experiences for your employees and your customers.”

Creating positive experiences means that people will stay, and keep buying, he says.

“They’ll keep partnering with you and they’ll keep coming back. So be conscious that working in financial services isn’t a service to you, it’s a service to others.”