Under fire: the high incidence of natural disasters has hurt industry profitability

The Home and Contents Insurance industry has grown steadily over the past five years. The high number of expensive claims arising from floods, cyclones and bushfires over the period have hurt industry profitability. Insurers have raised premiums significantly over the past five years to cope with the increased level of risk and to recover profits. Rising premiums are expected to increase industry revenue by an annualised 2.3% over the five years through 2017-18, to reach $8.9 billion. This includes an expected increase of 2.4% in the current year. The rise in premiums has also helped the industry by softening the effects of weaker investment revenue and the rising value of claims over the period.The cost of insuring homes and contents has risen over the past five years...read more.

Industry Statistics & Market Size
Revenue
$9bn
Annual Growth 13-18
2.3%
Forecast Growth 18-23
Profit
Employment
2,981
Businesses
94

Industry Threats & Opportunities

  • The rising cost of insuring homes and contents is leading to consolidation in the industry
  • Home and contents insurance premium revenue has risen strongly over the past five years
  • Investment income is forecast to remain weak in the early stages of the next five years
  • Industry Report - Industry Locations Chapter

    The spread and concentration of premiums in the industry generally follows the household dispersion and population density across Australia. As a result, approximately 78% of home and contents policies are issued across the eastern seaboard of Australia. In addition to being the most populated states, the eastern seaboard is also considered the most flood- and fire-prone regions, leading to comparatively higher premiums due to the higher risks for insurers. New South Wales has the highest issuance level, with 35.9% of industry premiums, due to the state's high population and number of households, and the particularly fire-prone regions west of Sydney. Que...purchase to read more.

    Additional Insights for the Home and Contents Insurance Industry

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

  • Ability to carry out risk assessment of clients
  • Access to highly skilled workforce
  • Economies of scale
  • IBISWorld analysts also discuss how external factors such as Number of households and Cost of natural disasters in the Home and Contents Insurance industry impact industry performance..

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    What's in this report

    What is the Home and Contents Insurance Industry?

    This industry underwrites home and contents insurance policies that protect against loss or damage to property due to theft, fire and other causes. They also protect against personal liability that may arise from injury on an insured person’s property.

    Industry Products
  • Strata insurance
  • Disaster insurance
  • Contents insurance
  • Liability insurance
  • Industry Activities
  • Contents insurance
  • Disaster insurance
  • Strata insurance
  • Liability insurance
  • Home insurance
  • Table of Contents

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

  • Current Performance
  • High levels of claims
  • Rising premiums
  • Weaker investment returns
  • Industry structure
  • Chart: Revenue Growth

  • Industry Outlook
  • Investment returns
  • Industry risks
  • Regulatory changes
  • Changing household composition
  • Table: Home and Contents Insurance Industry Revenue Outlook

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

  • Supply Chains
    Key Buying Industries
  • Residential Property Operators
  • Consumers

  • Key Selling Industries
  • Financial Planning and Investment Advice
  • General Insurance
  • Insurance Brokerage

  • Products & Services
  • Contents insurance
  • Disaster insurance
  • Strata insurance
  • Liability insurance
  • Chart: Home and Contents Insurance Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Owner-occupants
  • Renters
  • Investors
  • Residential property operators
  • Other
  • Chart: Major Market Segmentation for the Home and Contents 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 Home and Contents Insurance

  • Basis of Competition
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the Home and Contents Insurance Industry

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

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Home and Contents 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 Home and Contents 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
    Agents And Distributors
  • Companies who issue and sell insurance policies on behalf of the underwriter.
  • Coverage
  • The range and extent of unforeseen events in which insurers will offer a payout.
  • Reinsurance
  • Reinsurance is insurance that is purchased by an insurance company from another insurance company as a means of risk management.
  • Underwriting
  • The costs of administering insurance, which include acquisitions, levies and charges.
  • What Our Customers Say

    Why buy this report?

    IBISWorld’s Home and Contents Insurance market research report offers insightful industry analysis and research into the market at the national level. IBISWorld’s in-depth industry market research is presented in a logical and consistent format. The industry report contains key industry statistics, market size, industry trends, and growth and profit forecasts for a 5-year outlook period.

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

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