Financial Services Minister Daniel Mulino says addressing the exclusion of people from insurance as pricing becomes more individualised is a key issue.

“In many contexts, whether it be flood insurance or life insurance for people with significant risks, we’re seeing a lot of people excluded from insurance where insurers are able to identify that risk at a very granular level,” he said at a Sydney Institute event last week.

Dr Mulino said government needs to work with the sector to make sure “we can enable pools to work in a way they have for a long time, where the most vulnerable can be included in pools, but in a way that is affordable and sustainable”.

When asked what he wanted to achieve in the next couple of years, he flagged the insurance issue as “one of the ... big policy areas” in addition to superannuation matters.

“Insurance was one of the key things I talked about in the book Safety Net, and now the insurance sector is partly in my portfolio responsibilities,” he said.

Dr Mulino also said regulation should be periodically assessed against the public policy goals it aims to achieve, noting consumer protection features prominently for financial services because of the “complexity and dynamic change” in products and services.

“We need to make sure regulation targets real risks, removes unnecessary friction and encourages responsible innovation, all while keeping consumers at the centre of the system.”