Australian Prudential Regulation Authority (APRA) Chair John Lonsdale reiterated the regulator's priorities for 2023 in his speech to the Senate Economics Legislation Committee in Canberra.
The speech follows the release of APRA's policy and supervision priorities for 2023, outlining the regulator's key focus areas across insurance, superannuation, and banking industries.
In his speech, Lonsdale emphasised APRA's obligation as a prudential regulator – keeping an eye on events playing out in the present while scoping and preparing for long-term risks.
“There has been much work undertaken over recent years to strengthen and build resilience in the system and prepare the industry for any potential downturn,” he said. “Our 2023 policy and supervision priorities continue this work to increase resilience, standards, and capability across the industry for the benefit of all Australians.
“The agenda is measured to provide space for entities to deliver on these expectations while navigating through any economic turbulence, including in support of customers.”
This year, APRA will continue to address insurance affordability, availability, and sustainability challenges.
“The urgency of this work in general insurance is brought into sharp focus with each severe weather event affecting an Australian community. The problems are complex, and solutions will be multi-faceted, requiring a collaborative approach across industry, regulators, government, and consumers,” Lonsdale said.
As the impacts of climate change worsen in Australia and New Zealand, APRA will continue to engage with authorities and the insurance industry in both regions to address climate-related challenges.
“Late last year, we released the findings of the first Climate Vulnerability Assessment, which assessed the potential future financial impacts of climate change to help banks, insurers, and superannuation trustees better understand and manage these risks,” Lonsdale said.
“Last year's assessment focused on the banks; this year, we intend to focus on the insurance sector.”
APRA's paper about its policy and supervision priorities for 2023 outlined a series of goals focusing on embedding recent regulatory reforms, enhancing operational resilience, and ensuring that entities have the financial strength to withstand financial stresses.
As outlined in the APRA information paper, the regulator's key policy priorities include:
