Insurance industry associations from Australia, the United Kingdom, Canada and New Zealand announced Oct. 6 the formation of a new alliance, dubbed the Four Nations Insurance Alliance, to address the problems and emerging risks the country’s industries share.
The Insurance Bureau of Canada (IBC) has joined the Insurance Council of Australia, the UK’s ABI and the Insurance Council of New Zealand in formally announcing the alliance in early October. Problems the commonwealth countries’ respective industries have in common include growing climate risk, persistent inflation, regulatory costs, premium affordability and a growing protection gap. Shared emerging risks include cyber threats and greater geopolitical instability.
“Keeping cover sustainable and affordable depends on partnerships across the industry, government and borders,” the IBC states in its announcement about the alliance’s formation. “Under the partnership, the four trade insurance bodies will share evidence on what works, spanning public-private partnerships, hazard data, resilience investment regulation and emerging risks, including cyber and artificial intelligence, with the intent of turning lessons from one jurisdiction into practical reforms in another.”
The IBC’s president and CEO, Celyeste Power says the alliance members are all members of the Global Federation of Insurance Associations (GFIA). “We had some really common issues that we wanted to stay in even more regular contact on,” she told the Insurance Portal, in a discussion about the newly formalized, international relationship.
Exchanging information on lessons learned
The exchange of information can include lessons learned from the UK and Australia where regulators have added competition and market dynamism to their mandates, alongside commitments about reducing regulatory burden. New Zealand is expected to provide insight into the management of earthquake risk, and Canada is expected to be sharing information about wildfire risk and mitigation with representatives from the UK where wildfire has only recently become a concern.
“When we have record events like a $9.2 billion year of losses in Canada or a significant claims loss year in another jurisdiction like the UK, Australia, all of that gets wrapped into the global reinsurance prices that insurers pay,” Power notes. “These decisions that we make on a local basis actually can have an impact globally. It is all interconnected.”
Going forward, Power says the IBC’s vice president, public policy, Phil Donelson, will be the lead in the IBC’s relatively new relationship with the other associations.
She adds that adding regulatory hurdles for companies globally is going to cause countries like Canada to struggle with attracting capital. “Right now, we’re talking a lot about how we get more global capital coming into Canada. How do we protect our economy? How do we grow our economy and make us more competitive?” she asks. “That’s where I think the greatest short-term opportunity is to learn from what the United Kingdom is doing on their regulatory side of things and what Australia has committed to do.”
The associations’ CEOs are in the process of scheduling a regulatory-focused meeting within the next three months. “Stay tuned,” she says. “More to come.”
