Coalition Pledges to Cut Insurance Capital and Compliance Costs
Coalition Pledges to Cut Insurance Capital and Compliance Costs
The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.
The Coalition has proposed significant changes to the insurance sector's capital requirements and regulatory compliance, a move supported by the Insurance Council of Australia (ICA).
This pledge comes in the lead-up to the federal election, with shadow treasurer Angus Taylor detailing the plans that aim to alleviate the industry's financial pressures.
The ICA has expressed approval, acknowledging the importance of regulation in protecting consumers and building trust in the industry. However, it highlighted the strain that rapid regulatory reforms over the last ten years have placed on resources, which in turn increases costs for customers. The proposed adjustments to capital liquidity rules could enhance productivity and cut consumer expenses, which insurers have long advocated for.
According to Angus Taylor, the financial services sector faces compliance costs exceeding $1 billion, with Australians remaining underinsured and underadvised. Taylor emphasised the need for a balance in APRA's (Australian Prudential Regulation Authority) capital rules to ensure stability while improving access to finance for households and businesses. The goal is to reflect risk more accurately in insurer portfolios, reducing consumer costs and unlocking capital for investment, all while maintaining financial stability.
Expert insights from Scott Duncan, a Taylor Fry actuary, highlight challenges such as natural disaster impacts and building material cost inflation on home insurance. Duncan suggests that while capital requirements are essential, they become secondary to these factors. Current prudential standards ensure insurers hold sufficient capital against rare catastrophic events, allowing for potential higher-risk investments.
As regulatory frameworks assess the alignment of assets and liabilities, the asset risk charge mechanism remains vital. The experience of recent catastrophic events underscores the rapid changes in liabilities and the significant impact they can have, reinforcing the need for adaptable regulatory approaches.
Please Note: We do not endorse any specific products or companies. Some content is sourced from third parties, including press releases, and may not be independently verified for accuracy or completeness.
The Australian insurance industry is currently undergoing a significant transformation, marked by a surge in mergers and acquisitions (M&A). This trend is reshaping the market landscape, as companies seek to enhance their competitive edge and adapt to evolving regulatory and technological environments. - read more
In a significant development for Australia's construction sector, MECON has announced an increase in its underwriting capacity, now offering coverage up to $120 million for single projects. This enhancement, effective from March 10, 2026, applies to Section 1 (Material Damage) and includes Section 2 (Public Liability), providing more robust insurance solutions for larger and more complex construction endeavors. - read more
Australia's construction industry is currently facing significant challenges as rising costs reshape the insurance claims landscape. A recent report by Crawford & Company highlights that construction expenses are increasing at a rate faster than general consumer prices, with the Building Cost Index (BCI) rising nearly 5% annually. This trend is particularly evident in cities like Brisbane and Perth, where strong demand, logistical challenges, and a persistent shortage of skilled labour contribute to escalating costs. - read more
The Insurance Council of Australia (ICA) has expressed strong support for the proposed Competition and Consumer Amendment (Unfair Trading Practices) Bill 2026. This legislation seeks to introduce a general prohibition on unfair trading practices within Australian Consumer Law, thereby enhancing regulatory powers to address predatory operators in the insurance industry. - read more
The Australian Prudential Regulation Authority (APRA) has implemented emergency measures to address significant concerns within the commercial auto insurance sector. In response to widespread industry protests over substantial premium increases, APRA has introduced regulations aimed at safeguarding transport operators from financial hardship. - read more
Recent data from Marsh Risk's Global Insurance Market Index indicates a substantial decline in Australian commercial insurance rates. In the fourth quarter of 2025, rates fell by 12%, representing the most significant drop among the eight regions monitored by the index. This trend continues the downward trajectory observed since early 2024. - read more
In June 2025, the Australian Securities and Investments Commission (ASIC) and the Australian Prudential Regulation Authority (APRA) provided an update on their joint review of life insurance premium practices. This initiative was prompted by concerns over frequent and substantial premium increases that may not align with policy terms or policyholder expectations. - read more
In August 2025, the Australian Securities and Investments Commission (ASIC) released findings from a review of direct life insurance sales practices, uncovering persistent deficiencies despite previous regulatory interventions. - read more
Swiss Re Life & Health Australia has announced a suspension of new life insurance business activities in the country, effective October 2025. This decision stems from concerns over the sustainability of Total Permanent Disability (TPD) insurance products, which have seen a significant rise in claims, particularly related to mental health. - read more
Damien Mu, CEO of AIA Australia, has raised concerns about the sustainability of the current life insurance model, citing a significant increase in mental health claims and economic volatility. Speaking at the company's recent Thrive for Life presentation, Mu emphasised that the industry is facing structural changes driven by these factors. - read more
Farming in Australia is more than just a way of life; it is a critical sector that supports the nation’s economy and food supply. However, managing a farm comes with its own set of unique risks. From natural disasters to equipment failures, farmers face numerous challenges that can impact their livelihood. - read more
In the dynamic world of Australian agriculture, farm equipment plays a crucial role in the day-to-day operations of farms. From tractors to harvesters, having the right machinery means managing your farm more efficiently. However, the high value of this equipment makes it essential to protect it adequately through insurance. - read more
Welcome to the world of farming, where the fruits of your labor are as tangible as the soil you till. But just as the land is subject to the whims of nature, so too is the business of agriculture. This is where farm insurance becomes essential. Farmers face a set of challenges and uncertainties unlike any other industry, primarily due to the unpredictable forces of weather. - read more
As the backbone of Australian agriculture, farm equipment plays an essential role in day-to-day operations across our expansive and diverse landscapes. From the vast wheat belts to the tropical fruit farms, machinery ensures efficiency and productivity in the face of constant challenges. But with reliance on such equipment comes significant risk—the financial burden of damage or loss can be devastating to a farmer's livelihood. - read more
Welcome to our comprehensive guide on navigating the complexities of farm insurance for Australian farmers. As an integral part of the agricultural industry, insurance provides a safety net that helps secure the livelihood of farmers against unpredictable events that can lead to financial hardship. From property damage due to natural disasters to loss of livestock or crops, having adequate farm insurance can make all the difference in keeping a farming operation afloat in times of crisis. - read more
Farming is much more than an occupation; it's a way of life and a heritage that often spans generations. In today's ever-evolving agricultural landscape, embracing modern practices while preserving your farm's future has never been more crucial. Estate planning emerges as a pivotal strategy for safeguarding your agricultural legacy, ensuring that your hard-earned investments and the land you hold dear are passed on according to your wishes. - read more
Farm liability insurance is a type of coverage that protects farmers from financial losses due to legal claims and lawsuits. This insurance is crucial for safeguarding your farm against various liabilities that may arise from farm operations. - read more
Farming in Australia is not just a job, it's a way of life. However, it’s also a livelihood that comes with its own unique set of risks. From unexpected weather events to machinery breakdowns, the life of an Australian farmer is fraught with uncertainties. - read more
Crop insurance is a type of insurance policy designed to protect farmers from the financial losses that arise from damages to their crops. This could be due to various risks, including adverse weather conditions, pests, and diseases. - read more
Welcome to the first steps in future-proofing your farming legacy. When we think about the hustle and bustle of daily farm life, it's easy to overlook the critical importance of estate planning. For the Australian farmer, estate planning is not just a matter of securing your assets; it's about ensuring the survival and progression of your hard-earned labour to the next generation. - read more
Need a Quote?
Start your free farm insurance quote comparison here.
Knowledgebase
Flood Insurance: A specific type of property insurance that covers losses and damage caused by flooding.