Retirement
Allianz slammed with $250m increase to capital requirement
Allianz Australia’s self-assessment of its risk governance practices has uncovered major holes and has resulted in APRA requiring the insurer to hold an additional $250 million in capital.
Allianz slammed with $250m increase to capital requirement
Allianz Australia’s self-assessment of its risk governance practices has uncovered major holes and has resulted in APRA requiring the insurer to hold an additional $250 million in capital.
The prudential regulator announced that the requirement reflects issues identified within the self-assessment, and generally reflects weaknesses in non-financial risk management, murky accountability and a culture of risk that could be improved.
Allianz was one of 36 banks, insurers and superannuation licensees that APRA said it had asked to self-assess last year, with the aim of “gauging whether governance weaknesses identified by APRA’s Prudential Inquiry into Commonwealth Bank of Australia also existed elsewhere”.
APRA said it had advised Allianz that the extra $250 million capital requirement “will remain in place until it completes remediation work underway to strengthen risk management and closes gaps identified in its self-assessment”.
It’s the fifth entity to have an additional capital requirement imposed due to heightened operational risk, after APRA slammed the Commonwealth Bank with a $1 billion requirement last May, and has more recently imposed additional $500 million capital requirements on ANZ, NAB and Westpac.
According to APRA executive board member Geoff Summerhayes, the most recent decision sends a message to all insurers.
“The risk governance self-assessments not only demonstrated that the issues identified in the CBA inquiry exist beyond that institution — they also go beyond the banking sector,” he outlined.
Outlining that APRA-regulated general insurers paid out $27.5 billion to their policyholders last financial year, Mr Summerhayes considered that “with Australians relying on these policies to financially protect them when things go wrong, it’s essential that insurers have in place appropriate internal processes to honour those commitments”.
“By imposing this additional capital requirement, APRA is providing a financial incentive for Allianz to quickly and effectively implement its planned remediation work,” the board member stated.
“We also want to send a message to the broader insurance and superannuation industries that APRA expects the same high standards of risk management, including for non-financial risks, as we do for the banks.”
About the author
About the author
Superannuation
Aware Super takes on Australia's gender retirement gap, aiming for financial equality
Aware Super, one of Australia's largest superannuation funds with a 70 per cent female membership, is on a mission to close the gender gap that sees women retire with 30 per cent less super than men ...Read more
Superannuation
Age Pension increase prompts Australians to review their finances
The increase in the Age Pension, which takes effect today, should serve as a prompt for many older Australians to ensure they're maximizing their income as cost-of-living pressures persist, according ...Read more
Superannuation
Retirement reimagined as Australian optimism meets inflation worries in 2023 super fund insights
The latest reports on retirement confidence among Australians present a spectrum of sentiments, with fresh data revealing surprising optimism in some quarters while exposing underlying concerns in ...Read more
Superannuation
Aussie retirees face a shortfall as ideal retirement nest egg doubles what super will deliver
As Australians look towards retirement, the desired superannuation balance that many believe will ensure a comfortable retirement has significantly outpaced what they are on track to actually save. Read more
Superannuation
Super funds eye 6.5% return in 2023, despite a rocky start
As the year draws closer to its climax, Chant West unveils its projection for super funds in what can only be described as a year of economic ebbs and flows. Read more
Superannuation
A deep dive into Australia’s superannuation system
Australia has a robust retirement savings system known as superannuation designed to provide financial security to Australians in their post-work years. Read more
Superannuation
50,000 super fund members impacted by data breach
Around 50,000 member records were impacted by the breach that took place earlier this month. Read more
Superannuation
Two super funds tipped to reach $1tn by 2040
KPMG has released the findings from a new review. Read more
Superannuation
Aware Super takes on Australia's gender retirement gap, aiming for financial equality
Aware Super, one of Australia's largest superannuation funds with a 70 per cent female membership, is on a mission to close the gender gap that sees women retire with 30 per cent less super than men ...Read more
Superannuation
Age Pension increase prompts Australians to review their finances
The increase in the Age Pension, which takes effect today, should serve as a prompt for many older Australians to ensure they're maximizing their income as cost-of-living pressures persist, according ...Read more
Superannuation
Retirement reimagined as Australian optimism meets inflation worries in 2023 super fund insights
The latest reports on retirement confidence among Australians present a spectrum of sentiments, with fresh data revealing surprising optimism in some quarters while exposing underlying concerns in ...Read more
Superannuation
Aussie retirees face a shortfall as ideal retirement nest egg doubles what super will deliver
As Australians look towards retirement, the desired superannuation balance that many believe will ensure a comfortable retirement has significantly outpaced what they are on track to actually save. Read more
Superannuation
Super funds eye 6.5% return in 2023, despite a rocky start
As the year draws closer to its climax, Chant West unveils its projection for super funds in what can only be described as a year of economic ebbs and flows. Read more
Superannuation
A deep dive into Australia’s superannuation system
Australia has a robust retirement savings system known as superannuation designed to provide financial security to Australians in their post-work years. Read more
Superannuation
50,000 super fund members impacted by data breach
Around 50,000 member records were impacted by the breach that took place earlier this month. Read more
Superannuation
Two super funds tipped to reach $1tn by 2040
KPMG has released the findings from a new review. Read more