Australia Insurance Report

Published 06 May 2015

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Australia Insurance Report

BMI View: Australia ' s insurance sector is one of the best developed and most profitable in the world. However, the market faces a number of challenges, including a weakening local currency, economic headwinds and the strength of the country ' s superannuation system. That said, we believe most areas of the market will experience solid premiums growth over the next few years.

In Australia, both the non-life and the life segments are dominated by organisations that have the advantages of well-established brand names, ability to develop innovative products, proven ability to execute acquisitions, broad product portfolios, multi-channel distribution, financial strength, scale, access to capital and - in many cases - the advantage of being part of a broader financial services business with banking (and other) facets. In part because of government policy decisions in the past, both segments are highly competitive. Aside from annuities in the life segment, volumes are growing at a measured pace in most lines and sub-sectors.

In terms of premiums, the split between life and non-life insurance in Australia is roughly 50/50. The size of non-life insurance is boosted by the inclusion of private health insurance, which accounts for about 30% of all premiums written in that segment. In contrast, the relative size of Australian life insurance compared with other developed markets is compressed by the tendency of formally constituted insurers to focus on protection. In Australia, savings solutions, which would be delivered by life insurers in other countries, are delivered by the massive superannuation system, whose assets under management (AUM) amounted to over AUD1.8tn in mid-2014.

The non-life sector will be the clear outperformer of the two markets. Growth will be driven, in large part, by the rapid expansion of the private health insurance industry, which stands to benefit from plans by Tony Abbott's current government to increasingly scale back state-funded universal...

Table of Contents

BMI Industry View
7
SWOT
9
Political
11
Economic
12
Business Environment
13
Industry Forecast
15
Total Premiums Forecast
15
Total Premiums
15
Table: Total Gross Premiums Written (Australia 2011-2018)
17
Total Claims
17
Table: Total Insurance Claims (Australia 2006-2013)
18
Total Insurers' Assets
18
Table: Total Insurance Assets (Australia 2006-2013)
18
Life Premiums Forecast
19
Life Premiums
19
Table: Gross Life Premiums Written (Australia 2011-2018)
20
Life Claims
21
Table: Life Insurance Claims (Australia 2006-2013)
21
Life Insurers' Assets
22
Table: Assets (Australia 2006-2013)
22
Life Insurance Drivers
22
Table: Insurance Key Drivers, Disease Adjusted Life Years (Australia 2011-2018)
23
Table: Insurance Key Drivers, Private Health Expenditure (Australia 2011-2018)
24
Non-Life Premiums Forecast
25
Non-Life Premiums
25
Table: Gross Non-Life Premiums Written (Australia 2011-2018)
26
Net Premiums
27
Table: Net Non-Life Premiums Written (Australia 2011-2018)
27
Non-Life Claims
28
Table: Non-Life Insurance Claims (Australia 2006-2013)
28
Non-Life Insurers' Assets
29
Table: Assets (Australia 2006-2013)
29
Non-Life Sub-Sector Forecast
29
Table: Non-Life % Breakdown (Australia 2011-2018)
31
Motor And Transport Insurance
31
Table: Motor Vehicle Insurance (Australia 2011-2018)
31
Table: Insurance Key Drivers, Autos (Australia 2011-2018)
32
Table: Transport Insurance (Australia 2011-2018)
33
Table: Insurance Key Drivers, Freight Tonnage (Australia 2011-2018)
34
Property Insurance
34
Table: Property Insurance (Australia 2011-2018)
35
Health And Personal Accident Insurance
35
Table: Health Insurance (Australia 2011-2018)
35
Table: Personal Accident Insurance (Australia 2011-2018)
36
General Liability and Credit Insurance
36
Table: General Liability Insurance (Australia 2011-2018)
36
Table: Credit/Financial Guarantee Insurance (Australia 2011-2018)
37
Industry Risk Reward Ratings
38
Developed States Insurance Risk/Reward Index Q1 2015
38
Table: Developed States Insurance Risk/Reward Index - Q1 2015
39
Market Overview
40
Life Market Overview
40
Non-Life Market Overview
42
Table: Non-Life Market Share, USDmn, 2006-2013
44
Table: Non-Life Market Share (%), 2006-2013
45
Company Profile
47
AMP Limited
47
Comminsure/CFSGAM
50
Insurance Australia Group
53
QBE Insurance Group
57
Suncorp Group Limited
60
Demographic Forecast
63
Table: Australia's Population By Age Group, 1990-2020 ('000)
64
Table: Australia's Population By Age Group, 1990-2020 (% of total)
65
Table: Australia's Key Population Ratios, 1990-2020
66
Table: Australia's Rural And Urban Population, 1990-2020
66
Methodology
67
Industry Forecast Methodology
67
Risk/Reward Index Methodology
70
Table: Indicators
72
Table: Weighting of Indicators
73

The Australia Insurance Report has been researched at source and features BMI Research's independent assessment and forecasts for the insurance sector. It examines industry developments, key growth drivers and risk management projections, including the macroeconomic situation, government policy, regulatory environment and the level of development and potential for growth, broken down by line. Leading insurers are profiled, covering premiums, products and services and competitive positioning.

BMI's Australia Insurance Report provides professionals, consultancies, government departments, regulatory bodies and researchers with independent forecasts and regional competitive intelligence on the Australian insurance industry.

Key Benefits

  • Benchmark BMI's independent insurance industry forecasts for Australia to test other views - a key input for successful budgeting and strategic business planning in Australia's insurance market.
  • Target business opportunities and risks in Australia through our reviews of latest industry trends, regulatory changes and major deals, investments and macroeconomic developments.
  • Exploit latest competitive intelligence on your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs and latest activity).

Coverage

BMI Industry View

Summary of BMI’s key industry forecasts and views, covering the Life and Non-Life segments, the evolving competitive landscape and business operational risks.

Industry SWOT Analysis

Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the insurance sector and within the broader political, economic and business environment.

BMI Industry Forecasts

Historic data series (2005-2014) and forecasts to end-2019 for key industry indicators, supported by explicit assumptions, plus analysis of key risks to the main forecasts. Indicators include:

  • Life/non-life Premiums: Total premium growth (USDmn), premium growth (% y-o-y), penetration (% of GDP), density (USD per capita) for Life and Non-Life sectors, claims reinsurance, and assets and liabilities.
  • Non-life subsectors: Data on gross written premiums for all major Non-Life segments (motor, transport, property, personal accident, health, general liability and credit financial).

BMI’s Insurance Risk Reward Index

BMI’s Risk Reward Indices provide investors (Life and Non-Life) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide an indices of highest to lowest appeal to investors, with each position explained.

Company Profiles*

Examines the competitive positioning and short- to medium-term business strategies of key industry players. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.

Growth Drivers & Risk Management Projections

Key data and forecasts to end-2019 focusing on the growth drivers and downside risks to specific insurance lines including:

  • Population: Male/female, by age group, active/pensionable/youth population % of total, urban/rural population % of total.
  • Freight: Tonnage – air freight, rail freight, road freight, inland waterway.
  • Motor: Fleet size by type of vehicle % change y-o-y.
  • Epidemiology: Disease Adjusted Life Years and private health expenditure.

Market Overview & Rankings

Illustration of the insurance industry via rankings tables comparing gross written premiums by company (USDmn) and market share (%) for the top 20 players in both Life and Non-Life. This chapter also includes in-depth regional analysis of the market position, business strategies and investment potential of the leading insurance companies.

Sources

The insurance Reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports.

*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.

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Testimonials

'An essential, multi-faceted research tool. BMI’s thorough understanding of the major market players enables an informed – and informative – review of the sector’s actual performance, together with useful insights into current industry issues, which are topped-off with detailed and invaluable forecasts of industry and macroeconomic trends.’

Senior Research Analyst, ABC International Bank plc