Navigating the Future: APRA’s Call for Resilience and Innovation in the Insurance Sector
Jane Magill, Executive Director of General Insurance and Banking at the Australian Prudential Regulation Authority (APRA), delivered a keynote address at the 2025 Future of Insurance conference in Sydney.
Her speech, titled "Facing into the Future: Strategies for Readiness," outlined key challenges and priorities for the insurance sector as it navigates an increasingly complex and dynamic risk environment.
Magill began by acknowledging the significant impact of recent natural disasters, particularly Tropical Cyclone Alfred, which affected communities in southeast Queensland and northern New South Wales. She extended APRA’s sympathies to those impacted and commended insurers for their prompt response and support for affected policyholders. She emphasised that such extreme weather events highlight the growing challenges faced by the insurance sector and underscore the importance of preparedness and resilience.
One of the central themes of her speech was the increasing frequency and severity of climate-related risks and their implications for the insurance industry. Magill stressed that insurers must strengthen their risk management frameworks to account for evolving threats and ensure ongoing financial sustainability. She highlighted the role of stress testing and scenario analysis as critical tools for insurers to assess their exposure to extreme events and make informed strategic decisions.
Magill also addressed the broader regulatory landscape, emphasising APRA’s commitment to maintaining a robust and stable financial system. She underscored the need for insurers to uphold strong capital positions, enhance governance practices, and improve transparency in risk disclosures.
Another key area of discussion was the transformative impact of digital innovation and artificial intelligence (AI) on the insurance sector. Magill noted that while technological advancements present opportunities for improved efficiency and customer experience, they also introduce new risks that must be carefully managed. She encouraged insurers to adopt a balanced approach to digital transformation—leveraging the benefits of AI and automation while implementing robust safeguards to mitigate risks such as data security breaches, cyber threats, and ethical concerns surrounding algorithmic decision-making.
Magill concluded her speech by calling on insurers to embrace a proactive and forward-looking approach to risk management. She emphasised the importance of industry collaboration, regulatory engagement, and continuous adaptation to emerging risks. She urged insurers to not only respond to current challenges but also position themselves strategically for long-term resilience and stability in an evolving global landscape.
Her address reinforced APRA’s commitment to fostering a sound and sustainable insurance sector, ensuring that insurers remain well-prepared to navigate the complexities of the future while continuing to serve and protect policyholders effectively.