Introduction
The constant growth in the number of car owners transforms car insurance into an important market characterized by intense rivalry and numerous actors offering their services to clients. Thus, comprehensive coverage implies that an owner might repair or replace his/her car if it is stolen or damaged (IBIS World, 2021). In Australia, the number of registered motor vehicles has been increasing over the last five years, meaning that the demand for car insurance also continued to grow (IBIS World, 2021). Furthermore, following the recent forecasts, Australia’s car insurance industry will continue to grow over the next five years (IBIS World, 2021). The population has recovered after the adverse effects of the COVID-19 pandemic and demonstrates the stable and high demand for new vehicles (IBIS World, 2021). It means that most agencies and influential players can benefit from the further rise of the industry and high revenues.
Discussion
The car insurance industry in Australia is characterized by a high level of rivalry. Following a recent report, about 480 companies operate in the given sphere (IBIS World, 2021). It is explained by the opportunity to acquire stable benefits and the growing demand for this type of service mentioned above. Thus, the sector is characterized by the dominance of the four biggest insurers cooperating with the highest number of customers and possessing the biggest market shares. These include Suncorp Group Limited, Allianz Australia Limited, Insurance Australia Group Limited, and QBE Insurance Group Limited (IBIS World, 2021). The companies offer a wide range of services, including commercial motor vehicle insurance, private motor vehicle insurance, and comprehensive car insurance (IBIS World, 2021). They remain attractive to individuals, and this factor is evidenced by the continuously growing number of clients annually (IBIS World, 2021). In such a way, these four corporations dominate the market.
Regarding the critical importance of the sphere and the high level of revenue, the Australian government is focused on regulating the insurance industry and guaranteeing there is no critical damage done to both clients and companies (IBIS World, 2021). First, the Insurance Council of Australia (ICA) is responsible for monitoring the regulations linked to comprehensive car insurance and payments associated with car damage and compensation to owners (IBIS World, 2021). Second, the Australian Prudential Regulation Authority (APRA) is an independent agency that supervises institutions linked to the banking and insurance spheres (IBIS World, 2021). The functioning of these two bodies helps to establish the legal framework for the functioning of the sector and ensure that both clients and providers will be protected by the law and benefit from clear and transparent cooperation.
Conclusion
Altogether, it is possible to conclude that the car insurance industry is on the rise in Australia. The market size comprises about $23 billion, with an industry employment rate of about 9,210 (IBIS World, 2021). It means that the stable work of the sphere is critical for the country. For this reason, it is regulated by the ICA and APRA agencies guaranteeing that state laws will be observed and no fraud or illegal activities will be initiated by insurers. The market continues to grow and attract new players; however, at the moment, it is dominated by four major companies, such as Suncorp Group Limited, Allianz Australia Limited, Insurance Australia Group Limited, and QBE Insurance Group Limited. Following the recent statistics, the industry will continue to evolve as the population demonstrates high purchasing power and individuals are interested in new cars and services.
Reference
IBIS World. (2021). Car insurance in Australia – Market research report. Web.