The Australian Prudential Regulation Authority has called on the general insurance industry to show “greater leadership” in responding to consumer concerns.

The regulator has published a statement Chairman Wayne Byres prepared for Senate Economics Legislation Committee hearings that were cancelled after the federal election was called.

“Our message to the general insurance industry was that they should heed the advice they give to policyholders: to understand the risks they face and take steps to protect against them,” Mr Byres says.

“Pursuing short-term financial gain at the expense of doing the right thing inevitably comes at a steep cost in reputational damage and lost revenue, and we have challenged the industry to show greater leadership in responding to concerns about products or services, rather than being dragged into action by regulators or governments.”

Mr Byres also says the recent budget announcement of an additional $150 million over four years will “upgrade our supervisory capabilities”. The funding comes on top of $60 million over four years announced in November.

“Taken together, this additional funding will support an increase of roughly 100 additional permanent staff, a meaningful increase relative to our long-run operating level of about 600,” Mr Byres says.

“We will also be using our additional resources to implement our new enforcement approach, which we plan to make public later this month.

“Taking into account developments such as the Banking Executive Accountability Regime, the royal commission, the learnings from the [Commonwealth Bank] inquiry – and the fact we have had new powers given to us – we plan to set out a new approach to enforcement that will see us utilising our enforcement tools more quickly in future, particularly for unco-operative institutions.”