Workers expect their defined contribution plans to play a greater role in their retirement income than annuities.
Melbourne, Australia (PRWEB) June 15, 2012
The Insurance Brokerage industry is a vital player in the insurance market and is beneficial to both consumers and insurers. According to IBISWorld industry analyst Tim Stephen, “industry revenue depends on three things: policy pricing, demand for insurance and the popularity of agents and brokers as a medium for distributing and purchasing insurance”. Brokers and agents retain a portion of the premium of insurance policies sold. As such, anticipated insurance price increases will contribute to a forecast 4.3% rise in industry revenue for 2011-12, to $10.8 billion. With prices on the rise and demand rebounding with the economy, the industry is set to emerge healthily out of a slow period. Industry revenue is expected to grow by just 1.6% per annum in the five years through 2011-12.
However, the Insurance Brokerage industry faces intensifying competition from underwriters and banks. Underwriters are investing in online sales capabilities and new sales channels (e.g. bancassurance, which is selling insurance through banks) to reduce their reliance on agents and brokers. Brokers are guarding their distribution share by providing knowledge-intensive services to augment traditional insurance policy sales, and by focusing on more profitable markets such as the commercial segment. Looking forward, the industry is forecast to enter a stronger five-year period. Stephen adds, “industry performance will be solid as premium prices rise and many brokers consolidate to save costs on administration”. The number of registered insurance brokers is forecast to decline as the average company gets bigger.
IBISWorld classifies the Insurance Brokerage industry as having a low level of concentration. There are a large number of very small firms operating in the industry that do not have the resources or expertise to service large clients and/or clients that require specialist services, such as risk consultation in addition to regular broking services. Merger and acquisition activity has increased in recent years, indicative of an industry that is in the mature stage of its economic life cycle. The major players in the industry are Aon Corporation, Marsh Mercer Holdings and Jardine Lloyd Thompson.
For more information, visit IBISWorld’s Insurance Brokerage in Australia report in Australia industry page.
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IBISWorld industry Report Key Topics
This 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. They also earn fee income for the provision of risk management consulting and claim assessment and adjustment services. Foreign-based insurance underwriters that mainly engage in insurance broking domestically are also included in this industry.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
About IBISWorld Inc.
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