They have a saying in the insurance industry: “A lucky underwriter beats a good underwriter any day of the week”.  Well, we have it confirmed once again that Australia is the Lucky Country.  This time the evidence is provided by APRA in their submission to the Financial System Enquiry on 31 March 2014.



In the Executive Summary on Page 6 it states:



“APRA eschewed light touch supervision in the wake of the collapse of HIH Insurance in 2001, and it has significantly strengthened its supervisory approaches and practices since then. In APRA’s view, its most enduring contribution to the resilience of institutions in the crisis came from its ‘close touch’ efforts to promote their financial health prior to the crisis, and to deal conclusively with struggling institutions.”



So the truth of the matter is that following the massive impact of the collapse of HIH, APRA changed and changed more than significantly.  It grew very large teeth and it has not been afraid to use them.  By 2007/2008 as the financial crisis unfolded the heavy hand of APRA had been felt by Australia’s financial institutions and their management had not played the same games as their counterparts around the world.  Australia survived relatively intact.  Now APRA, quite rightly, is seen as a guiding light for other regulators globally.



Still, there is a bigger question.  Why can’t we learn from the past and not take our eye off the ball when things are going well again?  Perhaps it is simply the optimistic nature of humankind.



If things are going pretty well for your organisation now, please investigate your corporate memory bank and have a look for where history may be repeating itself.

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