In this edition, we discuss the Australian Prudential Regulation Authority's (APRA) Insurance Climate Vulnerability Assessment stress test, which projects a significant widening of Australia's home insurance protection gap and a keynote address by Australian Securities and Investments Commission (ASIC) Commissioner, Mr Alan Kirkland, on enforcement action against superannuation trustees. We also cover the Federal Court's decision to impose $6 million in penalties against oil and gas services company, Qteq Pty Ltd (Qteq), for attempted cartel conduct, in proceedings brought by the Australian Competition and Consumer Commission (ACCC).
In Over the Horizon, we consider the inflationary outlook as the Middle East conflict continues to disrupt global oil supply.
Governance
APRA stress test reveals one in four Australian households could be uninsured by 2050 as climate risks widen the insurance protection gap
On 24 March 2026, APRA published its report entitled “Mind the Gap” (the Report), setting out the results of its Insurance Climate Vulnerability Assessment stress test. The Report examines how climate change may affect home insurance affordability and widen the insurance protection gap, with implications for the broader financial system. To consider how Australia’s home insurance protection gap may evolve between now and 2050, APRA worked with five Australian general insurers, Allianz, Hollard, IAG, QBE and Suncorp, using two climate scenarios. The first scenario involves higher global emissions with greater weather-related impacts whilst the second assumes a lower emissions pathway but greater risks arising from a delayed and rapid transition. Both scenarios test how financial system resilience may be impacted under adverse conditions, rather than to serve as forecasts or predictions. The key findings include that the proportion of uninsured Australian households is projected to rise from approximately one in seven today to one in four by 2050, with weather-related losses expected to increase from less than $7 billion to over $16 billion annually under the higher physical risk scenario. The home insurance protection gap is expected to widen in regional and rural communities given the increased exposure to weather perils and lower average incomes, with New South Wales and Queensland accounting for around 60% of uninsured homes. The Report highlights the need for a coordinated response across governments, industry and regulators, including investment in risk reduction measures (such as flood levees) and consideration of how the growing protection gap could affect mortgage credit risk and broader asset portfolios. APRA’s stress test aligns with Priority 6 of the Federal Government’s Sustainable Finance Roadmap and acts as an important reminder for directors of the mandatory climate-related financial disclosure reporting requirements for large businesses and financial institutions under Chapter 2M of the Corporations Act 2001 (Cth). These requirements were discussed in one of our previous insights.
Regulatory
ASIC signals superannuation trustee enforcement as a key priority
On 26 March 2026, ASIC Commissioner, Alan Kirkland, delivered a keynote address at the Law Council of Australia's Superannuation Lawyers Conference in Hobart, outlining ASIC's enforcement response to high-risk superannuation switching misconduct. Mr Kirkland confirmed that ASIC has nearly 50 staff working across 26 investigations and has commenced 12 court cases against 21 defendants. Enforcement actions to date have included stop orders, the appointment of receivers and liquidators, court proceedings to preserve assets and restrict travel of persons of interest, search warrants executed with the Australian Federal Police and the cancellation of licences and banning of financial advisers. As discussed in a previous edition of Boardroom Brief, ASIC has flagged superannuation as a key regulatory focus area.
Mr Kirkland outlined five common lessons arising from ASIC’s enforcement actions against superannuation trustees:
- The expectation of substantive due diligence
- ASIC’s focus extends beyond onboarding to ongoing monitoring and active oversight
- Member choice does not displace trustee responsibility
- Trustee systems and controls must be operational
- Trustees must be able to evidence their basis for satisfaction.
Mr Kirkland's address emphasises that ASIC views superannuation trustees as "a significant link in the chain” of conduct and particularly an “important gatekeeper” when it comes to addressing the kind of misconduct observed in this area. ASIC’s enforcement actions carry broader governance and compliance lessons, particularly around due diligence, ongoing monitoring and the ability to evidence that systems and controls are working in practice. Directors with oversight of superannuation trustee entities or managed investment schemes should keep in mind these five lessons and consider reviewing their governance frameworks accordingly.
Legal
Qteq and its executive chairman collectively fined $6 million for attempted cartel conduct
On 26 March 2026, the Federal Court fined Qteq $5 million, and its executive chairman, Mr Simon Ashton, $1 million for attempted cartel conduct, in proceedings brought by the ACCC. The $1 million penalty against Mr Ashton is understood to be the highest penalty awarded against an individual for a competition law breach in Australia. In April 2025, the Federal Court found that, on five occasions between 2017 and 2019, Mr Ashton and Qteq attempted to induce suppliers in the oil and gas services industry to enter into contracts, arrangements or understandings containing cartel provisions, including provisions not to supply services to large oil and gas companies, to rig a tender and to market share. The ACCC Chair, Gina Cass-Gottlieb, noted that each of Qteq’s attempts to secure the arrangements were unsuccessful only because the other parties rejected the offers. Justice Bromwich imposed a non-indemnification order preventing Mr Ashton from claiming any insurance in relation to the penalty, noting that the penalties imposed on Mr Ashton “would have no real deterrent effect if he did not have to pay them himself." Directors should keep in mind the ACCC's focus on holding senior executives personally accountable for the conduct of a business, particularly for serious misconduct or where there appears to be poor compliance culture. This case is a reminder for boards to review their competition law compliance frameworks to ensure they are fit for purpose, including staff training, internal reporting and escalation procedures, and whistleblower protections. The imposition of a non-indemnification order also highlights the limit of insurance cover and the risk of personal financial exposure for individuals involved in cartel conduct.
Over the Horizon
Inflation risks rise as the conflict in the Middle East continues and the Government announces the fuel excise cut
As discussed in a previous edition of Boardroom Brief, the escalating conflict in the Middle East is generating significant economic and market disruption. Due to this, Economists have warned that the impacts on inflation may continue to rise in the coming months. Treasurer, Jim Chalmers, acknowledged that earlier Treasury modelling showing inflation would peak at around 5% "[looks] pretty conservative now.” Economists warn that a resolution to the conflict may not prevent inflation from increasing further. The Commonwealth Bank of Australia Head of Australian Economics, Belinda Allen, expects that if Brent crude oil remains around USD120 per barrel until June, headline inflation could increase to 5.4%. However, if the oil prices spike to USD150 per barrel, headline inflation could peak at 6.4% in June. NAB senior economist, Taylor Nugent, expects the Reserve Bank of Australia (RBA) to raise the cash rate by a further 0.25 percentage points at its May meeting, taking it from 4.1% to 4.35%. Following the national cabinet meeting on 30 March 2026, the Albanese government announced a temporary cut to the fuel excise by 26.3 cents per litre and the temporary removal of the 32.4 cents per litre heavy vehicle road user charge for at least the next three months. Treasurer, Jim Chalmers, has indicated that these measures will cost the federal budget $2.55 billion but are expected to reduce headline inflation by 0.5 of a percentage point in the June quarter. However, concerns remain that inflation will increase once the temporary fuel excise cut expires on 30 June 2026. Directors should be prepared for a sustained period of elevated costs, with the combination of rising interest rates and increased energy costs expected to ripple through supply chains and persist for some time. Companies with exposure to energy-intensive supply chains, transport and construction should consider the impact of further rate rises on consumer demand, debt servicing and input costs. Boards may wish to revisit financial forecasts and stress-test assumptions in light of these recent developments, particularly as earnings season begins to draw near.