CEO of the National Insurance Brokers Association (NIBA) Phil Kewin wants the rapid pace of regulatory change to slow down this year.

Mr Kewin outlined his concerns in responses to an Insurance News survey on what 2022 holds for the industry. “There is a sense that the Government has over-reached on regulation and governance in insurance and financial services, so hopefully this year will see less new legislation and regulation,” he said.

Mr Kewin was also sceptical about increasing Government involvement in the insurance market via reinsurance pools or mutuals.

“These are not necessarily the answer, as there are too many risks with this approach, and in any event a mutual must take out insurance against major loss events anyway,” he said.

“There can be some circumstances where government intervention may well be required, and this could well be where the cost of claims needs to be distributed beyond the affected area.

“One reason why Far North Queensland (FNQ) is an issue is the number of policyholders is quite small, yet they still have to carry the cost of billion-dollar losses.

“This makes the cost per policy expensive, and often unaffordable. This was the opportunity with the Cyclone Reinsurance Pool, which could have spread the cost of FNQ cyclones across a larger premium base, but that is not what has been designed.”

Mr Kewin repeated industry calls for greater investment in natural disaster mitigation measures.

“At the end of the day, if governments do the mitigation and resilience, the cost of risk should become more bearable and affordable.”

CBN CEO Richard Crawford echoed Mr Kewin’s views on regulation.

“The work effort created by the regulatory change in my opinion is not commensurate with the protections that have been delivered for consumers,” he said.

“In many cases the legislation, while well intended, was impractical in its delivery and has not delivered the intended behaviours or protections. The wide variety of industry approaches is not helping the situation.”

Insurance Advisernet MD Shaun Standfield says clients are the main beneficiaries of the changes and the industry has worked hard to ensure a smooth transition, but there will be ongoing impacts.

“Due to the volume of changes, continuing education will be key to the understanding and bedding down of these changes with both clients and staff.

“There is no doubt the costs of running brokerages have increased significantly in not only enacting the changes but to monitor compliance with these changes moving forward.”

Lloyd’s Regional Head Chris Mackinnon says the industry has responded positively to “all the change that has been thrust upon us”.

While increased emphasis being placed upon customer outcomes “is undoubtedly a positive”, he warns that the reforms are still a work in progress.

“There is a danger that the end objectives of better consumer outcomes could be eroded by the very significant financial burden placed on industry to implement change.

“There is also now significant complexity and overlap in the raft of regulations and legislation that are in play, and we need to work with government to now look to improve efficiency and reduce complexity, whilst maintaining the same outcome objectives.”

A full report of the 2022 survey will appear in the next issue of Insurance News magazine.