Risky business: Intensifying competition from insurers and banks has limited growth

The Insurance Brokerage industry has grown over the past five years on the back of rising insurance premiums and a strong consumer preference for purchasing insurance policies from brokers. Brokers provide advice and expertise to private and commercial clients and match them to the most suitable policies. Additionally, brokers benefit insurers as they offer an additional distribution channel and act as a contract sales team. Strong policy sales have increased commissions for the industry, with revenue forecast to rise at an annualised 1.0% over the five years through 2017-18. However, this includes a projected decline of 0.6% in 2017-18 to $12.5 billion, following changes to commission structures...read more.

Industry Statistics & Market Size
Revenue
$12bn
Annual Growth 13-18
1.0%
Forecast Growth 18-23
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Profit
x.x%lock
Employment
23,798
Businesses
2,924
Market Share of Companies

Industry Threats & Opportunities

  • Despite solid revenue growth, brokers have faced intensifying competition from insurers and banks
  • Online comparison sites pose a threat to industry firms and raise competition for private clients
  • The industry is expected to benefit from further outsourcing of insurance-related services

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    Industry Report - Industry SWOT Analysis Chapter

    The Insurance Brokerage industry is currently in the mature phase of its economic life cycle. Industry value added, which measures an industry's contribution to the economy, is forecast to grow at an annualised 0.9% over the 10 years through 2022-23. This represents an underperformance to overall GDP, which is projected to rise at an annualised 2.6% over the same period, indicating the industry's contribution to the overall economy is shrinking.There was an increase in acquisition activity over the past five years, as companies sought to increase profitability through greater economies of scale. Ope...purchase to read more.

    Additional Insights for the Insurance Brokerage Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Insurance Brokerage Industry are

  • Having a good reputation
  • Having a loyal customer base
  • Access to niche markets

    • IBISWorld analysts also discuss how external factors such as Number of businesses and Number of motor vehicles in the Insurance Brokerage industry impact industry performance..

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    What's in this report

    Industry Products

    What is the Insurance Brokerage Industry?

    The industry includes individuals and businesses that act primarily as agents or brokers in selling annuities and insurance policies. Industry participants earn commission income, mostly as a percentage of the premium of insurance policies sold. The industry also includes operators earning fee income for risk management consulting and claim assessment and adjustment services.

    Industry Products
  • Commercial general products
  • Private general products
  • Life insurance
  • Health insurance and other
    • Industry Activities
  • Actuarial services
  • Claim assessment and adjustment
  • Operating insurance agencies
  • Insurance broking
  • Insurance consulting
    • Table of Contents

    About this Industry

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources

    Industry at a Glance

    Industry Statistics Snapshot
    Industry Structure
    Executive Summary

    Industry Performance

    Executive Summary
    Key External Drivers
  • Number of businesses
  • Number of motor vehicles
  • Real household disposable income
  • Number of households
  • Cost of natural disasters

    • Current Performance
  • Trading landscape
  • Profitability

    and structure

  • Competition
  • Commission structures
  • Chart: Revenue Growth

    • Industry Outlook
  • Trading environment
  • Natural disasters
  • Growth opportunities
  • Table: Insurance Brokerage Industry Revenue Outlook

    • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Insurance Brokerage Industry Lifecycle vs The Economy

    • Products & Markets

    Supply Chains
    Key Buying Industries
  • Life Insurance
  • General Insurance
  • Consumers

    • Key Selling Industries
  • General Insurance
  • Professional Services

    • Products & Services
  • Life insurance
  • Commercial general products
  • Private general products
  • Health insurance and other
  • Chart: Insurance Brokerage Industry Products and Services Segmentation

    • Demand Determinants
  • Economic conditions
  • Distribution channels
  • Prices
  • Demographics

    • Major Markets
  • Commercial clients
  • Private clients
  • Chart: Major Market Segmentation for the Insurance Brokerage Industry

    • International Trade
    Business Locations
    Chart: Business Locations by State

    Competitive Landscape

    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Chart: Cost Structure Benchmarking – Sector vs Insurance Brokerage

    • Basis of Competition
  • Internal competition
  • External competition

    • Barriers to Entry
  • Table: Barrier to Entry Checklist for the Insurance Brokerage Industry

    • Industry Globalization

    Major Companies

    Steadfast Group Limited, AUB Group Limited, IBNA Limited,
  • Table: Steadfast Group Limited - financial performance
  • Table: AUB Group Limited - financial performance
  • Table: IBNA Limited - financial performance

    • Operating Conditions

    Capital Intensity
  • Chart: Level of Capital Intensity for the Insurance Brokerage Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

    • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

    • Regulation & Policy
    Industry Assistance

    Key Statistics

    Table: Industry Data for the Insurance Brokerage Industry
    Includes:
  • Industry Revenue (2009-2023)
  • Industry Gross Product (2009-2023)
  • Establishments (2009-2023)
  • Businesses (2009-2023)
  • Employment (2009-2023)
  • Wages (2009-2023)

    • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data

    Jargon & Glossary

    Bancassurance
  • The selling of insurance products by a bank.
    • Broker
  • A party that connects buyers with sellers to facilitate the exchange of goods or services.
    • Distribution Network
  • While they act independently, individual brokers can form partnerships or alliances and can join networks to share resources and benefit from leads provided by the network.
    • Gross Written Premium (Gwp)
  • The total premium written by an insurer before deductions for reinsurance and ceding commissions.
    • Market Hardening
  • A market where insurance premium prices are increasing. Insurance markets harden when the demand for insurance exceeds supply. The supply of insurance depends on an insurer's capital position.
    • Premium
  • An amount of money paid to acquire a certain level of insurance cover for a specified period of time.
    • What Our Customers Say
    Why buy this report?

    IBISWorld’s Insurance Brokerage market research report is a comprehensive guide to market size and growth prospects. Our industry reports offer strategic industry analysis of the factors influencing companies, including new product developments, economic, lifestyle and demographic influences, distribution and supply chain factors and pricing issues. Full analysis accompanies our data forecasts to illustrate how the market responds to emerging industry trends.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Insurance Brokerage:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Insurance Brokerage market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Insurance Brokerage, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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