Industry Analysis & Industry Trends
The General Insurance industry provides protection to individuals, households and businesses from the financial loss associated with events such as car accidents, floods, break-ins and medical malpractice. General insurers provide this coverage at a fraction of the potential loss by spreading risk. The industry earns revenue from the sale of insurance policies (premium income) and the investment of premium reserves in bonds, stocks and other assets (investment income).
Over 95% of the industry's premium income is derived from the renewal of policies that relate to existing risk, with the rest reflecting a change in risk exposure or pricing conditions. Policy pricing alternates between softening (price declines) and hardening (price increases). A... purchase to read more
Industry Report - Starting a New Business Chapter
The moderate level of barriers has enabled non-traditional competitors who cross-sell financial services to customers to enter the market.
The General Insurance industry has a high level of regulatory requirements, most of which pertain to maintaining adequate capital and remaining solvent. Insurers must also be licensed and are required to regularly report to APRA.
Maintaining adequate capital is a significant barrier to growth, because to underwrite a large book of business, an insurer will need more capital. However, insurers do have the ability to cede some risk to reinsurers, which can increase their capacity to grow... purchase to read more