The Australian Prudential Regulation Authority (APRA) has released an update on its supervision and policy priorities, serving as a vital guide for entities within the insurance sector.
The report revealed the regulator's strategic focus, aligning with its commitment to transparency and accountability.
This interim update spans the initial half of the year, acting as a precursor to the forthcoming 2024-25 Corporate Plan, expected by the end of August.
Over the next six months, APRA aims to safeguard the safety and resilience of regulated entities, instil confidence and stability in the financial system, and support the community towards positive financial outcomes.
Reflecting on the events of the past year, APRA acknowledged the critical role of robust prudential supervision and regulation.
“The banking turmoil in early 2023 was a reminder of how quickly stress can emerge and how robustly entities and authorities need to be positioned to be able to respond appropriately. In addition, the financial system has faced geopolitical risk, rising interest rates and high inflation, the growing threat of cyber attacks, and increased frequency of natural disasters,” said APRA chair John Lonsdale.
APRA will focus on operational and cyber resilience, targeted changes to the prudential framework for authorised deposit-taking institutions, improvements to superannuation trustees' practices, and maintaining a delicate balance in the insurance sector between financial sustainability and enhancing affordability and availability.
While the update outlined the next six months' focus, APRA emphasised the continuity of many initiatives beyond this period.
“The majority of the industry-level priorities below are not new, but this update outlines key areas of focus, timeframes, and next steps. Although this update covers the next six months, many initiatives will continue beyond this period,” Lonsdale said. “APRA will remain adaptable to changes in the external environment and will adjust these priorities as needed to ensure the industries it regulates can continue to respond to new and emerging risks.”
APRA recently started a process to modernise its prudential architecture by retiring outdated insurance prudential guides.
