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APRA Addresses Home Insurance Affordability Challenges with New Initiatives

APRA Chair John Lonsdale noted that multiple factors contribute to this difficulty, not solely reinsurance expenses.

APRA is actively engaging with insurers, government agencies, and the private sector to address these affordability issues.

Lonsdale explained that APRA dedicates considerable resources to gathering data and facilitating dialogue with policymakers. Despite these efforts, insurance affordability is a convoluted issue involving many stakeholders, and the solutions are far from straightforward. APRA's recently released 2025-26 corporate plan prioritizes enhancing access to affordable reinsurance over the next four years, a critical step towards mitigating costs.

APRA is currently consulting with general insurers to explore strategies that ensure access to affordable reinsurance as global costs rise. The authority plans to unveil detailed proposals during the first half of the 2025-26 period. This initiative follows last year's announcement of potential changes to APRA’s reinsurance framework, aiming to provide insurers with alternative protection options like catastrophe bonds.

Additionally, APRA is preparing to release its insurance industry climate vulnerability assessment in the latter half of 2025-26. This assessment involves Australia’s five largest general insurers and includes a comprehensive analysis of detailed premium data. The findings will equip governments, insurers, policyholders, and the community with insights into how climate change risks might affect insurance affordability in the medium term.

APRA’s multi-pronged approach reflects a commitment to addressing the significant challenges around insurance costs, promising further developments in insurance frameworks and climate risk assessments that could shape the future landscape of the industry.

Published:Friday, 22nd Aug 2025
Source: Paige Estritori

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Insurance News

AFCA Rules on Disputed Car Insurance Payout

22 Aug 2025: Paige Estritori

The Australian Financial Complaints Authority (AFCA) has decided against a man's claim for a car insurance payout, which he pursued following a dispute with his ex-wife. The issue arose when the man's Toyota Landcruiser was involved in an accident in April, prompting him to file for a cash settlement of $55,950. However, the ex-wife, who held the insurance policy, later blocked his access to the payout. - read more

APRA Addresses Home Insurance Affordability Challenges with New Initiatives

22 Aug 2025: Paige Estritori

The Australian Prudential Regulation Authority (APRA) has highlighted the ongoing challenges of home insurance affordability, emphasizing that the issue remains complex despite a recent moderation in reinsurance costs. APRA Chair John Lonsdale noted that multiple factors contribute to this difficulty, not solely reinsurance expenses. APRA is actively engaging with insurers, government agencies, and the private sector to address these affordability issues. - read more

ASIC Calls for Revamp in Life Insurance Sales and Service

21 Aug 2025: Paige Estritori

The Australian Securities and Investments Commission (ASIC) has issued a call to action for life insurance companies, urging them to enhance their product offerings and sales processes. While acknowledging some progress since the Hayne Royal Commission, ASIC highlights ongoing issues within the industry. The regulator emphasized the importance of centering strategies around customer needs, particularly as companies aim to expand direct-to-consumer sales. - read more

Regulatory Scrutiny Reveals Ongoing Failures in Direct Life Insurance Sales

20 Aug 2025: Paige Estritori

The Australian Securities and Investments Commission (ASIC) has released findings from a recent review, revealing persistent deficiencies in the direct sales practices of the life insurance industry. Despite heightened scrutiny following the Hayne Royal Commission, challenges remain in several key areas, including product design, sales strategies, remuneration, and customer complaint handling. - read more

Life Insurers Urge Government Action on Mental Health Funding

19 Aug 2025: Paige Estritori

Life insurers in Australia have joined forces with mental health advocates to press the federal government to honour its $1 billion pledge for mental health initiatives. The Council of Australian Life Insurers (CALI) is among the key signatories of an open letter organized by Australians for Mental Health, urging swift action on funding allocation. - read more

Victorian Resilient Homes Initiative Supported by Insurance Council

18 Aug 2025: Paige Estritori

The Insurance Council of Australia (ICA) has expressed strong support for a Victorian initiative proposing a resilient homes scheme, akin to those currently operating in New South Wales and Queensland. This recommendation emerged from a comprehensive inquiry into climate resilience conducted by Victoria's Legislative Council Environment and Planning Committee, which presented 93 findings alongside 82 recommendations this week. - read more

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Knowledgebase

Insurance:
In law and economics, insurance is a form of risk management primarily used to hedge against the risk of potential financial loss.

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