Industry Analysis & Industry Trends
The past five years have been characterised by a run of poor investment performance and consecutive seasons of destruction. As the frequency of natural disasters has risen, so has the frequency of insurance claims. As natural disasters have caused damage across Australia, the value of payouts has risen quickly, putting pressure on insurers' profit margins. Although insurers have been able to pass on the rising costs to policy holders, the time lag between the new premium prices and payouts has caused profit margins to decline substantially. The rise in claimants has been compounded by poor investment income because of the low-yield environment. Weak economic conditions have driven up demand for bonds and other high-quality fixed income assets that insurers are heavily invested in... purchase to read more
Industry Report - Starting a New Business Chapter
Barriers to entry into the industry are considered high. The Car Insurance industry is an established industry with many major players that have a strong grip on certain areas of the market. Consumer trust is paramount to success in the industry, meaning that new players with no history of good records will find it difficult to secure new contracts. In the same line, long-time operators generally have a long record of satisfied customers, reinforcing the reputation of incumbent players and making it harder for new operators to succeed.
Another difficult barrier to overcome is compliance with regulations set by overseeing bodies... purchase to read more