The Investment and Financial Services Association (IFSA) has issued a base plan for the industry to respond to a major disaster such as an earthquake, bird flu outbreak, a tsunami or a terrorist attack.
"A coordinated industry approach to trading, pricing, claims, redemptions and applications could mean the difference between widespread panic and rational decision making," IFSA said in a statement.
IFSA members had requested a more formal mechanism so consistent messages could be conveyed to member companies in times of crisis, IFSA chief executive Richard Gilbert said.
The plan establishes the criteria for activating a disaster plan, actions that are likely to be required, the content of a major disaster status report and a crisis management team.
"The plan will form the basis of IFSA's liaison with important stakeholders, such the Australian Securities Exchange, banks, government and agencies, regulators and other relevant industry associations," Gilbert said.
It does not replace IFSA members' individual business continuity plans.
Yesterday, the Australian Prudential Regulation Authority (APRA) released key results of a recent stress test it conducted on the insurance industry to consider its potential claim exposures from a pandemic.
It found general insurers experienced a more marked impact on claims than life insurers, whereas in scenarios with higher mortality rates, life insurers were more significantly affected.
The parameters were a 20 per cent infection rate in the population and a 0.5 per cent death rate of those infected.
Business and macroeconomic assumptions had little impact on the pandemic claims estimates, with the largest impact resulting from the direct implications of assumptions about mortality, illness duration and closure of business.
Last year during discussions with the industry, APRA noted financial institutions were less advanced at that time in estimating potential financial impacts of a pandemic.
APRA said a coordinated financial modelling exercise could assist in pandemic planning efforts.
