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.
