Grave concerns: Investment return fluctuations have dealt a fatal blow to industry revenue

The Life Insurance industry has recorded significant revenue volatility over the past five years. Industry revenue declined over the period due to higher cancellation and lapse rates, and fluctuations in investment returns. Premium income has risen for most of the past five-year period, with the 2013 introduction of the MySuper laws helping to increase life insurance uptake through superannuation. Industry revenue is expected to decline at an annualised 5.1% over the five years through 2019-20, to $63.0 billion. However, strong investment returns are expected to support a 3.6% revenue rise in 2019-20.Industry operators provide protection against the financial hardships that arise from death, disability, major illness or injury...read more.

Industry Statistics & Market Size
Revenue
$63bn
Annual Growth 15-20
-5.1%
Forecast Growth 20-25
Profit
Employment
6,508
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 five-year period
  • Rising house prices and mortgage debt levels are likely to support increased insurance coverage
  • Industry Report - Industry Locations Chapter

    The distribution of establishments for the Life Insurance industry is largely concentrated in the states of New South Wales, Victoria and Queensland. This result reflects the distribution of the general population and life insurance customers across Australia. Life insurers also tend to be located in cities regarded as financial centres. New South Wales accounts for the largest share of industry establishments, with this portion outweighing the state's share of the population. The disparity can be attributed to the head offices of many life insurance firms being located in the financial hub of Sydney. Many administrative duties are performed in centralised locations, further contributing to the concentration of establishments in New South Wales...purchase to read more.

    Additional Insights for the Life Insurance Industry

    IBISWorld has determined the most important Key Success Factors for the Life Insurance are:

  • Effective cost controls
  • Having an extensive distribution/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, exclusions may exist 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
  • Royal Commission into Misconduct in the Banking, Superannuation

    and Financial

    Services Industry

  • Acquisition activities
  • Chart: Revenue Growth

  • Industry Outlook
  • Distribution channels and superannuation changes
  • Rising awareness
  • Growth opportunities
  • 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
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the Life Insurance Industry

  • Industry Globalization
    TAL Dai-ichi Life Australia Pty Limited, AMP Limited, AIA Australia Limited, MLC Limited, Commonwealth Bank of Australia, Zurich Financial Services Australia Limited,
  • Table: TAL Dai-ichi Life Australia Pty Limited - financial performance
  • Table: AMP Limited - financial performance
  • Table: AIA Australia Limited - financial performance
  • Table: MLC Limited - financial performance
  • Table: Commonwealth Bank of Australia - financial performance
  • Table: Zurich Financial Services Australia 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 (2011-2025)
  • Industry Gross Product (2011-2025)
  • Establishments (2011-2025)
  • Businesses (2011-2025)
  • Employment (2011-2025)
  • Wages (2011-2025)
  • Wages (2011-2025)
  • Purchases (2011-2025)
  • Profit (2011-2025)
  • Depreciation (2011-2025)
  • Rent (2011-2025)
  • Utilities (2011-2025)
  • Other (2011-2025)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Apra
  • The Australian Prudential Regulation Authority
  • Investment Linked Policies
  • An insurance policy with an investment component. The performance of the investment component is 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?

    IBISWorld’s Life Insurance market research report can be used to help you: understand market size and growth potential; major companies; draft business plans and pitch books; and conduct benchmarking and SWOT analysis. Our industry analysis highlights macro industry trends in the overall sector and micro trends faced by companies that do business in the industry. The industry report also provides key industry statistics and 5-year forecasts to anticipate future industry prospects so you can decide with confidence.

    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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