Industry Analysis & Industry Trends
The past five years have been characterised by declining investment returns and consecutive seasons of destruction. As the frequency of natural disasters has risen, so has the frequency of insurance claims. 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. Together, these circumstances have resulted in weak revenue growth... purchase to read more
Industry Report - Industry Key Buyers Chapter
Market share concentration in the industry is high. The four largest players account for 69.4% of revenue, with IAG and Suncorp dominating the industry with a combined market share of 57.4%. IAG and Suncorp operate more than 12 brands of car insurance in Australia.
Industry concentration is expected to increase due to the pervasiveness of consolidation activity. Industry players have historically displayed a strong appetite for growth through mergers and acquisitions. For example, IAG received a takeover bid from QBE in 2008... purchase to read more