Narrow road: Falling interest rates and higher claim volumes have put pressure on margins

Although the Car Insurance industry has grown steadily over the past five years, it has been characterised by falling investment returns and faced with a rising number of natural disasters. As the frequency of natural disasters has risen, so too has the frequency of insurance claims. Although insurers have been able to pass on the rising costs to policyholders, the time lag between the new premium prices and payouts has driven industry profitability downwards over the five-year period. Due largely to the privatisation of compulsory third-party (CTP) insurance in South Australia, industry revenue is expected to grow at an annualised 1.3% over the five years through 2017-18, to reach $19.7 billion. This includes revenue growth of 0.4% in the current year...read more.

Industry Statistics & Market Size
Revenue
$20bn
Annual Growth 13-18
1.3%
Forecast Growth 18-23
Profit
Employment
7,248
Businesses
45

Industry Threats & Opportunities

  • The number of motor vehicles on Australian roads has increased steadily over the past five years
  • Some online-only car insurers have achieved strong growth over the past five years
  • The 10-year bond rate is projected to increase, boosting returns on investments
  • Industry Report - Industry Analysis Chapter

    The Car Insurance industry continues to be supported by Australia’s increasingly crowded roads. The number of registered motor vehicles in Australia has increased steadily over the past five years, which has boosted demand for car insurance. Steady increases in the number of car insurance policies and the cost of compulsory third-party (CTP) insurance have caused revenue derived from premiums to increase steadily, particularly with a growing CTP market. However, industry investment returns have declined over the past five years, limiting revenue growth. The industry generates revenue from policy premiums and investment of premium reserves. Although investment income has declined over the past five years, the steady growth in premiums has more than offset this decline. Ove...purchase to read more.

    Additional Insights for the Car Insurance Industry

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

  • Ability to effectively manage risk
  • Maintenance of excellent customer relations
  • Management of quality investment portfolio
  • IBISWorld analysts also discuss how external factors such as year bond rate and Number of motor vehicles in the Car Insurance industry impact industry performance..

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    What's in this report

    What is the Car Insurance Industry?

    The industry underwrites (i.e. assuming the risk and assigning premiums) car insurance policies. Car insurance provides financial protection against physical damage to automobiles and bodily injuries resulting from traffic collisions. Car insurance can also protect against resulting liability.

    Industry Products
  • Commercial motor vehicle insurance
  • Private motor vehicle insurance
  • Compulsory third-party motor vehicle insurance
  • Industry Activities
  • Underwriting compulsory third-party motor vehicle insurance
  • Underwriting private motor vehicle insurance
  • Underwriting commercial motor vehicle insurance
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • year bond rate
  • Number of motor vehicles
  • All Ordinaries index
  • Natural disasters

  • Current Performance
  • Falling investment returns
  • Online insurance
  • Growth strategies
  • Chart: Revenue Growth

  • Industry Outlook
  • Strategic moves
  • Regulatory changes
  • Table: Car Insurance Industry Revenue Outlook

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

  • Supply Chains
    Key Buying Industries
  • Road Freight Transport
  • Taxi and Limousine Transport
  • Passenger Car Rental and Hiring
  • Consumers

  • Key Selling Industries
  • Financial Asset Investing
  • Insurance Brokerage

  • Products & Services
  • Private motor vehicle insurance
  • Compulsory third-party motor vehicle insurance
  • Commercial motor vehicle insurance
  • Chart: Car Insurance Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Passenger vehicle owners
  • Freight and manufacturing industries
  • Other markets
  • Car hire and rental firms
  • Passenger transportation companies
  • Chart: Major Market Segmentation for the Car 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 Car Insurance

  • Basis of Competition
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the Car Insurance Industry

  • Industry Globalization
    Insurance Australia Group Limited, Suncorp Group Limited, Allianz Australia Limited, QBE Insurance Group Limited,
  • Table: Insurance Australia Group Limited - financial performance
  • Table: Suncorp Group Limited - financial performance
  • Table: Allianz Australia Limited - financial performance
  • Table: QBE Insurance Group Limited - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Car 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 Car 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
    Ctp Insurance
  • Compulsory third-party insurance is an obligatory insurance that covers personal injuries inflicted to people (other than the drivers) involved in an accident.
  • Fleet Insurance
  • A specialised motor vehicle insurance that is usually purchased by business operators that own more than 15 vehicles.
  • Reinsurance
  • A type of insurance that is usually purchased by an insurance company as a risk management tool.
  • What Our Customers Say

    Why buy this report?

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

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