APRA calls for increased resilience, innovation and leadership in the insurance industry

In her speech, Suzanne Smith urged the insurance industry to embrace resilience, innovation, and leadership as core pillars to future proof the industry, at a time of heightened scrutiny around operational resilience, consumer trust, and the evolving risk landscape driven by climate change and artificial intelligence.

Key themes from the speech included:

1. Resilience as a strategic imperative – resilience should not be considered as a one-off initiative, but a continuous discipline. Insurers must proactively manage internal risks – such as governance, customer outcomes, and operational readiness – while navigating external pressures like climate volatility and economic uncertainty. APRA considers basic resilience as a non-negotiable, and includes fundamental pillars such as:

• A solid capital foundation backed by careful underwriting practices and strong risk management strategies.
• Resilient operations that include oversight of third-party providers and preparedness for significant risk events.
• Reliable and well-structured claims management systems, supported by effective processes and controls.
• Cybersecurity measures that adapt proactively to emerging and evolving threats.

2. Innovation to meet rising expectations – insurers must rethink how they engage with customers and design products that are both transparent and responsive. Poor consumer understanding of policies could erode trust and threaten the sector’s social licence. AI is constantly evolving and has significant promise in underwriting, cybersecurity, claims processes, crisis prevention and fraud detection. The insurance industry should be at the forefront of implementing AI efficiencies in their business, however, must remain cognisant of risks associated with AI and automation, and ensure appropriate safeguards, policies and training are in place.  

3. Leadership and accountability – industry leaders should take ownership of what’s within their control and to lead with integrity, especially in times of crisis and transformation. Particularly as it relates to cybersecurity, Boards need to lead from the top down and ensure they are fully educated on the risks associated with cyber breaches.

Future proofing the insurance industry 

APRA’s emphasis on strong leadership and governance over risk management, operational resilience, and cyber security – particularly in light of the evolution of AI – presents an opportunity for businesses to rethink and redesign governance frameworks and strategies.

In particular, Grant Thornton can help support your business with:

• Strengthening governance frameworks to meet regulatory expectations.
• Enhancing cyber resilience through tailored risk assessments and controls.
• Navigating AI-related risks, including ethical use, data governance, and operational impacts.
• Building leadership capacity to drive cultural and strategic change across risk functions.

APRA’s message is clear: insurers must be proactive, transparent, and resilient. Whether you're refining your risk strategy, preparing for regulatory engagement, or exploring AI integration, Grant Thornton is here to help.

Read APRA Executive Board Member Suzanne Smith’s speech at the ICA conference here.

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