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By Tracey Berry & Eliot Abraham
We recently invited the insurance industry to share their perspectives on readiness for the incoming Contract of Insurance Act. Although the number of responses was lower than hoped, the input we did receive provides a valuable snapshot of where the industry stands today. This paper highlight’s common themes, areas of strength, and the challenges that still lie ahead.
Our survey attracted responses from licensed insurers, and intermediaries across the market. The individuals who participated represented senior leadership, risk and compliance functions, and operational roles. Product providers spanned life, health, and general insurance. While the sample size was modest, it provides directional insights into how the market is assessing impacts and preparing for change.
Overall, awareness of the Act is high. The vast majority of respondents described themselves as either familiar or very familiar with its requirements, and almost all had attended at least one external briefing session. However, when it came to execution, the picture is more concerning. None of the respondents had yet established a formal programme of work, and most replied that they have not yet started mobilising. Outside of the survey we are aware, through our own work however, that some insurers have commenced. Commencing turns the theoretical impacts into practical implications, allowing impacts and work programs to be formalised.
While 60 percent rated themselves as “not ready” and 40 percent as only “partially ready”, all respondents confirmed their intent to mobilise through a project, rather than address through BAU. This highlights the anticipated size and complexity of the work involved.
When asked about the area’s most likely to be impacted, respondents pointed to almost every aspect of their businesses, from training and policy wording to compliance controls and claims handling. Training and awareness came through as a universal priority as part of implementation, selected by every respondent. Policy wording, disclosure obligations, and the underwriting questionnaire were highlighted as the highest impact critical areas, with customer communications not far behind.
While governance, systems, and risk frameworks were also mentioned, these tended not to be ranked within the top three priorities, suggesting that the industry is initially concentrating on the customer-facing elements of the Act and have yet to turn their attention to the more internal, but also important, aspects.
In terms of impact, most respondents expect a medium effect on both staff and customer experience. For staff, this will likely mean changes to scripts, forms, and processes. For customers, the expectation is that new disclosure rules and clearer contract language will alter how they engage with insurers. The impact on operations and compliance controls is seen as less certain, with opinions ranging from low to high. Reflecting that many organisations are still working out what this will mean in practice.
Despite the challenges, respondents do expect to realise positive outcomes. The most widely expected benefits are fairer customer outcomes and improved trust, alongside clearer contract wording. Some also pointed to opportunities for innovation and for products that better fit customer needs. Encouragingly, no one suggested that the Act would deliver “no significant benefits.”
Of the challenges to overcome. Time pressure and competing priorities were the dominant concerns, with many organisations worried about balancing this work against other regulatory change. Resource constraints and skills gaps were also noted, along with the risk of regulatory fatigue. While legacy systems and budgets are factors, they were generally seen as secondary compared to the more immediate challenge of finding the capacity to deliver.
Most respondents are targeting completion (and compliance) in 2027, with planned completion dates spread across the year, they are expecting to use most of the available timing runway. As detailed planning commences, we expect these initial targets to evolve accordingly.
Overall, the findings paint a picture of an industry that understands the importance of the Contract of Insurance Act but has not yet fully turned intent into action. The focus on policy wording, disclosure, and customer communication shows a commitment to customer outcomes, which is encouraging and aligned with the intent of the Act.
We suggest to make the most of the available time, firms will need to shift quickly from awareness to execution. The Act will likely impact multiple areas and there can be third parties (for example intermediaries or reinsurers) to bring on the journey. Getting going now will mitigate delivery risks.
Conducting a gap analysis is often an important first step so firms can begin the no regrets work and adjust as more insight and guidance is provided to the market. A gap analysis may initially take a compliance perspective, but we prefer the broader opportunity it can open, when it also considers the additional benefits that new regulatory change can present. For example, some of the uplift may drive further simplification which may support the value proposition and distribution.
Thank you once again to all who contributed. If you would like to talk to Mosaic about engaging in a gap analysis or understanding how to implement the Act further, please contact us.
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