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Australian insurers unfazed by regulation
Australian insurers appear to be unfazed by the likelihood of increased regulation resulting from the global financial crisis, according to research conducted by KPMG.
The research suggests that even though the insurers believe the tougher regulation will result in a requirement for higher levels of capital, they believe the cost of capital is the bigger issue.
The KPMG research summarises the views of 392 industry executives from 47 countries and was conducted during August and September.
Looked at globally, the research suggested that the majority of global respondents believed that increased regulation would improve risk management, create better financial stability and encourage a longer-term view of the business.
However, it also suggested that those improvements would come at a cost, with nearly half of the survey respondents citing increased regulation as the most significant barrier to growth, the main impact of which would be increased capital requirements.
Commenting on the outcome of the research, KPMG head of insurance in Australia Brian Greig said the Australian industry already operated in a well-regulated environment and did not expect further significant regulatory changes.
“Our regulatory regime was enhanced and continues to evolve since the collapse of HIH in 2001, with the flow-on effects positively benefiting our industry,” he said.
AUTHOR
Mike Taylor
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