History of Life Insurance in Australia
Having insurance is such a fundamental part of everyone’s lives. It is almost unthinkable to not have the proper insurance before travelling or buying a car. Still, when you think about it, the insurance market is a usually unknown topic to most although that it is essential.
General, health, and life insurance all are concerned with minimising the risk of financial loss. It is only right that you know how everything came to be. Here’s a brief timeline for you.
There were 22 local life insurance offices in 1950 and only three foreign companies were registered in Australia. During the 1950s to 1960s, there was an increase in foreign-owned insurance companies that wanted to compete in the Australian insurance market. The foreign firms challenged the division between general and life insurance as they did not have the same distinction when it came to the insurance that they offered.
The threat of competition brought enough market pressure among various insurance firms. It led to the branching out and expansion of local firms, paving the way to a different structure.
Around the 1970s, there were already 48 insurance firms operating in Australia and 35 foreign companies. Government insurers expanded their business to life insurance around the 1980s. State insurance officers were created, but they only allowed to operate within their state or territory. Should they take interest in doing otherwise, they must register under the federal government.
Still, the added competition of the insurance provided by government agencies was not as impactful as the increase of foreign firms in the decades prior.
In 1990, the number of insurers had reached 58. Not soon after, the decline has begun, and the number decreased to 42 by the 2000s. Research from the Deakin University found that 42 life insurers made up about 30% of the insurance sector, with 168 general insurers making up about 15%.
By this period, the industry shares of the banks’ life insurance companies increased to 44%. The increased competition from banks’ insurance offerings had a bearing with life insurers.
The decade of 2010s has seen an even higher rise in foreign insurance firms. The Life Insurance Insights Report revealed that the market share of foreign-controlled companies in 2014 reached 41.4%, which further grew to 47.8% in 2017. Technological advances during this decade have quickly transformed the global landscape, bringing forth new opportunities and products.
The increase of global competitors puts even more pressure on insurance specialists from local firms to invest in innovation and various technological platforms to attract more customers.
Compare Life Insurance Plans in the Market today
Knowing the history of life insurance in Australia gives you some perspective on life insurance today. It shows how competition developed among those providing general, health, and life insurance. Until today, many insurance companies continue to have different life insurance policies at varying prices.
One important move to consider when getting insurance is to compare the market. Look at the features and covers of each plan before making an assessment and decision. You’ll be so grateful when you get the best low-cost plans that are available to you.
Check out your options in the market using a trusted comparison site like Makes Cents!
Have you considered switching your life insurance policy? Use our Life Insurance comparison service today.