2021 Insurance Risk & Compliance Benchmarking Survey

A spotlight on how risk and compliance teams are responding to regulatory changes and the COVID-19 pandemic

Welcome to our third Risk and Compliance Benchmarking Survey of Australian Insurers. The survey aims to give leaders of Risk and Compliance teams a view of how their peers manage risk and compliance functions, and how they are responding to regulatory changes and the COVID-19 pandemic. 
We received responses to our survey from executives of 37 different organisations across general, life and private health insurers, with gross premium ranging from below $200m to over $5bn. We express our sincere thanks to those who participated in the survey. 
We hope you find the information and insights in the Risk and Compliance Benchmarking Survey to be helpful as you and the industry respond to the new and upcoming regulatory changes and increased expectations from regulators.

At the time of our previous survey in 2019, the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (“Royal Commission”) and APRA self-assessments into governance, culture and accountability had set the path ahead for insurers and their risk and compliance functions. Prioritisation was being given to customer outcomes, supported by enhanced Board oversight and a clearly defined and understood culture.

Two years on, and whilst continuing to respond to the recommendations from the Royal Commission, insurers have also had to dynamically navigate and respond to the challenges of the COVID-19 pandemic, as well as keep up with the pace of continued regulatory changes.

In our experience, organisations that have established teams with the right capabilities, have been best placed to proactively embrace the proposed Financial Accountability Regime (“FAR”) as an opportunity to articulate accountability in their 3 Lines of Defence. In addition, those insurers who have continued to actively promote risk culture have been able to both tactically respond to the challenges of the last 2 years, whilst at the same time looking ahead by developing and implementing a risk and regulatory change strategy.

The impact of COVID-19

FY20 started like any other year, however, when the COVID-19 pandemic hit, the world we knew was turned upside down. Industries were affected quite differently by the pandemic; some prospered while others felt the pain of the economic impacts and lifestyle changes under multiple lockdowns.

The insurance industry has had significant involvement in responding to the impacts of the pandemic, with business interruption and contingency policies paying out claims. However, there has also been criticism over coverage issues, resultant legal cases, and the unknown impact of economic and claiming behaviour changes on the life and health insurance sectors.

The results of the survey indicate that, pleasingly, insurers have responded well to the pandemic both in terms of managing their risk profile, as well as strengthening systems and controls. Respondents have told us this has been achieved with minimal disruption to their business and operations. All insurers who participated in the survey have noted that their systems and controls were effective in managing the risk exposure and effects caused by COVID-19.

Contact us

Rod Balding

Rod Balding

Partner, Financial Services - Assurance, PwC Australia

Tel: +61 2 8266 1324

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