Whilst the General Insurance industry continues to experience competitive pressures, opportunity still exists for those who utilise analytics effectively and deepen customer relationships to make above market returns
The domestic home and motor insurance markets remain the two largest General Insurance markets in Australia, with $7.9b and $8.7b in annual premiums respectively as at December 20161 . CIL holds approximately 7.5% of total home insurance premiums and 2% of the motor market .
The Australian General Insurance market is expected to grow at a compound annual growth rate (CAGR) of 3.3% from FY16 through to FY182. This growth environment is mixed across both portfolio’s, with home driven by an increase in average premium, partially
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A lower frequency of natural catastrophes, combined with continued focus on cost savings, resulted in overall profits rising to $4,058 million, compared with the previous 12 month’s drastic fall to $3,452 million.
This was mainly driven by:
Insurers continued ability to maintain cost discipline. The industry expense ratio decreased marginally in 2016 to 25.7 percent.
Competitive market conditions are expected to continue to put pressure on premiums, with forecast GWP growth expected to continue to be in the low single digits
Whilst the challenger brands continue to provide significant competition within the personal lines market, their rate of growth slowed this
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Customer-based pricing)
Focus on customer advocacy, transparency and better disclosure. Working closely with the Retail Bank to become accredited under the Better Customer Outcome Project (BCOP)
Constant investment in digital capability required given shifting customer preferences, however must consider end-to-end business capability rather than acquisition focus only and continue to leverage CBA assets (e.g. Commbank app)
Emerging partnerships with InsureTech
Insurers are looking for new technologies to improve their customer experiences, deliver innovative products and services and transform their business models.
Increasing focus on ‘cost out’ projects and process simplification
With pressures on margins, and organic growth slowing, ‘cost out’ projects and process simplification have been focus area of insurers as a way to maintain or improve profit levels.
Brand