Weathering the storm: Fluctuations in investment returns have prompted volatility

Operators in the Life Insurance industry provide protection against the financial hardships that arise from death, disability, major illness or injury. Loss of income is a common effect of such life events and can be a significant cause of financial problems. Despite the benefits of life insurance, Australia remains underinsured according to actuarial firm Rice Warner, with the complexity of products causing many consumers to avoid insurance. Uncertainty surrounding global economic growth and the effects of the European sovereign debt crisis over the past five years, combined with a higher cancellation and lapse rate over the current year, have weighed on industry performance...read more.

Industry Statistics & Market Size
Revenue
$66bn
Annual Growth 13-18
-3.5%
Forecast Growth 18-23
Profit
Employment
28,608
Businesses
29

Industry Threats & Opportunities

  • Fluctuations in investment returns have prompted significant industry revenue volatility
  • A recovering sharemarket has kept investment revenue high for most of the past five years
  • Rising house prices and mortgage debt levels are likely to support increased insurance coverage
  • Industry Report - Industry Analysis Chapter

    The performance of the Life Insurance industry has been mixed over the past five years. The 2013 introduction of MySuper laws boosted premium income over the first half of the five-year period. Investment returns, also a key component and driver of industry revenue and profitability, recovered after the 2011-12 market dip, supporting industry growth. However, a low volume of new business sales and higher policy lapse rates across the industry have weighed on premium income growth. Furthermore, investment revenue, which includes realised and unrealised gains and losses, fell significantly in 2015-16 following three strong years. Lower net policy revenue classified as deposits also reduced industry revenue in 2016-17. How...purchase to read more.

    Additional Insights for the Life Insurance Industry

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

  • Effective cost controls
  • Having an extensive distribution and collection network
  • Ability to effectively manage risk
  • IBISWorld analysts also discuss how external factors such as All Ordinaries index and Real household discretionary income in the Life Insurance industry impact industry performance..

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    What's in this report

    What is the Life Insurance Industry?

    Industry operators provide life insurance cover and investment-linked life insurance products. Life insurance is a contract obligating the insurer to pay designated beneficiaries a sum of money in the event of the insured individual’s death, disablement, serious illness or injury. As with all insurance contracts, there may be exclusions that limit the insurer’s liability.

    Industry Products
  • Individual lump sum risk
  • Group lump sum risk
  • Individual disability income insurance
  • Group disability income insurance
  • Industry Activities
  • Providing term life insurance
  • Providing permanent life insurance
  • Providing annuities
  • Providing other life-based savings and investment schemes
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • All Ordinaries index
  • Real household discretionary income
  • year bond rate
  • Residential property yields
  • Median age of the population

  • Current Performance
  • Trading landscape and profitability
  • Investment returns
  • Opportunities
  • Chart: Revenue Growth

  • Industry Outlook
  • Rising awareness
  • Distribution channels
  • Growth opportunities
  • Industry reviews and regulation
  • Table: Life Insurance Industry Revenue Outlook

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

  • Supply Chains
    Key Buying Industries
  • Superannuation Funds
  • Consumers

  • Key Selling Industries
  • Funds Management Services
  • Insurance Brokerage
  • Superannuation Funds Management Services

  • Products & Services
  • Individual lump sum risk
  • Group lump sum risk
  • Individual disability income insurance
  • Group disability income insurance
  • Other
  • Chart: Life Insurance Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Commercial clients
  • Retail clients
  • Chart: Major Market Segmentation for the Life Insurance Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Chart: Cost Structure Benchmarking – Sector vs Life Insurance

  • Basis of Competition
  • Internal competition
  • External competition

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

  • Industry Globalization
    AMP Limited, TAL Dai-ichi Life Australia Pty Limited, National Australia Bank Limited, Commonwealth Bank of Australia, Australia and New Zealand Banking Group Limited,
  • Table: AMP Limited - financial performance
  • Table: TAL Dai-ichi Life Australia Pty Limited - financial performance
  • Table: National Australia Bank Limited - financial performance
  • Table: Commonwealth Bank of Australia - financial performance
  • Table: Australia and New Zealand Banking Group Limited - financial performance

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

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

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Life Insurance 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
    Churning
  • When financial advisers recommend that clients change their insurance policy for the primary purpose of triggering new upfront commissions.
  • Investment Linked Policies
  • An insurance policy with an investment component. The performance of the investment component in linked to investment markets.
  • Term Insurance
  • Policies that provide a predetermined lump sum payment upon the occurrence of the insured event during a specified period of time.
  • What Our Customers Say

    Why buy this report?

    The Life Insurance market research report provides key industry analysis and industry statistics, measures market size, analyzes current and future industry trends and shows market share for the industry’s largest companies. IBISWorld publishes the largest collection of industry reports so you can see an industry’s supply chain, economic drivers and key buyers and markets.

    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 Life Insurance:
    • 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 Life Insurance 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 Life Insurance, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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