{"id":29685,"date":"2015-05-19T12:30:26","date_gmt":"2015-05-19T02:30:26","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=29685"},"modified":"2025-09-02T11:34:35","modified_gmt":"2025-09-02T01:34:35","slug":"apra-to-group-insurers-learn-from-the-past","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2015\/05\/19\/apra-to-group-insurers-learn-from-the-past\/","title":{"rendered":"APRA to Group Insurers \u2013 Learn from the Past"},"content":{"rendered":"

The Australian Prudential Regulation Authority has not ruled out the possibility of further supervisory action in the group insurance market, warning insurers to learn from the lessons of the past.<\/span><\/p>\n

The cautionary message was delivered via a discussion paper, released to group insurers this week, which details APRA\u2019s findings from a recent information gathering exercise. Last year, APRA asked insurers to provide a summary of their experience over the last three years, and the actions that had led to that experience.\u00a0A summary of these findings has now been released to insurers by the regulator, in the hope it prompts further consideration and adoption of revised processes across a range of business and risk areas.<\/p>\n

APRA\u00a0encourages insurers to document lessons learned from this recent experience<\/h6>\n

In the cover letter accompanying the findings, APRA Executive General Manager, Diverified Institutions Division, Brandon Khoo<\/strong>, said it was important that insurers carefully consider the various matters discussed, particularly\u00a0as some of the issues in more recent times have also been seen in the past. “APRA\u00a0encourages insurers to document lessons learned from this recent experience and where\u00a0necessary adopt revised approaches so as to be better prepared to respond in future,” Mr Khoo said.<\/p>\n

The discussion paper highlighted that APRA had been closely monitoring the experience in the group insurance market for some time, noting that insurers who took action in 2011 and 2012 were \u2018generally better prepared for worsening conditions and sustained smaller losses\u2019.<\/p>\n

APRA observed that the success of the insurer\u2019s response to the worsening market conditions reflected the effectiveness of enhanced oversight by the board. However, APRA also noted that most insurers had not changed their risk appetite and risk management framework in light of the recent group insurance experience, and questioned whether this approach was \u2018sufficiently effective\u2019 to respond to issues like those recently experienced.<\/p>\n

Claims management was similarly identified as a key focus for group risk insurers. The regulator encouraged insurers to review their claims assessment procedures, and make improvements such as:<\/p>\n