life insurance in australia

Australia's insurance market can be divided into roughly three components: life insurance, general insurance and health insurance. These markets are fairly distinct, with most larger insurers focusing on only one type, although in recent times several of these companies have broadened their scope into more general financial services, and have faced competition from banks and subsidiaries of foreign financial conglomerates. With services such as disability insurance, income protection and even funeral insurance, these insurance giants are stepping in to fill the gap where people may have otherwise been in need of a personal or signature loan from their financial institution.

Types of insurance

Life insurance

Life insurance products sold in Australia include term life insurance and disability income insurance. Australian insurers are unusual in providing a lump sum Total and Permanent Disability insurance. Life insurers also sell superannuation investment products. Life insurance in Australia is sold through intermediaries (such as brokers) as well as direct to the consumer, in fact Australia is one of the leading countries when it comes to selling life insurance through direct channels.

Life insurers

Some of the life insurance companies which operate in Australia are:

• AIA Australia
• AAMI Life
• AMP Limited
• AXA Note: As of 30 March 2011, AXA Asia Pacific Holdings Limited and all of its Australian and New Zealand subsidiaries ceased to be members of the Global AXA Group and became members of the AMP Group.
• Asteron Life (Suncorp)
• NRMA Insurance
• Allianz Australia
• GIO Life
• MLC
• Macquarie Life
• OnePath (ANZ)
• Real Insurance
• TAL (previously Tower Australia)
• Zurich Australia

In addition, life insurance is also sold by friendly societies, credit unions, health funds and large retailers such as Coles Supermarkets and Woolworths Limited.

General insurance

General insurance products sold in the Australian market can roughly be divided into two classes:

• Liability insurance such as Compulsory Third Party (CTP) motor insurance, worker's compensation, professional indemnity insurance and public liability insurance, business insurance;
• Property insurance such as Home and Contents insurance, travel insurance, and comprehensive motor vehicle insurance

Certain types of insurance, such as CTP and worker's compensation, are statutory (i.e. are required by law), and can differ considerably by state.

General insurers

Large general insurer groups include:

• Insurance Australia Group (brands include: NRMA, RACV, CGU, SGIO, Buzz)
• Suncorp (brands include: AAMI, GIO, APIA, Just Car, Bingle, Vero, InsureMyRide, Shannons, CIL, Terri Scheer)
• QBE Insurance
• Auto & General (brands include: Budget Direct, Australia Post, Virgin Money, and they underwrite home and car insurance from 1Cover)
• Allianz Australia (who also underwrite travel insurance from 1Cover)
• Hollard Insurance (brands include: Real Insurance, Guardian)

Previous insurers include:

• Promina Group merged with Suncorp in 2007
• SGIO and SGIC purchased by IAG
• HIH Insurance collapsed in 2001
• MMI taken over by Allianz in 1998

Health Insurance

The Australian Government provides a basic universal health insurance, Medicare. Private health insurance in Australia is limited to those services not covered by Medicare or to services provided in private hospitals.

The Australian Taxation system encourages middle to high income earners to take out Private Health Insurance. While most taxpayers pay a 1.5% Medicare levy, an additional 1% Medicare Levy Surcharge is payable by those taxpayers who earn more than $88,000 and do not have Private Health Insurance.

Industry structure

Life insurers were traditionally mutual companies, but in the 1980s and 1990s many of them demutualised and with a few large exceptions are owned by banks. The large remaining insurers have become "financial services" organisations and now derive the majority of their revenue from superannuation investment products. There are four main distribution channels for life insurance, including group insurance, bank insurance, IFAs and direct channels (mainly through TV).

General Insurers have a more diverse ownership structure, with more stand alone independent general insurers (although some life insurers do own general insurers).

Health insurers are still predominantly mutuals. The notable exception is Medibank Private, the largest private health insurer in Australia, which was owned by the Government of Australia, but was privatised in 2014-15.

Insurance companies of Australia

A

• AAMI
• AMP Limited
• AXA

B

• Bingle
• Budget Direct

C

• CGU Insurance
• Colonial Mutual
• Colonial Mutual Chambers
• Combined Insurance
• Cover-More

G

• GIO General
• GMHBA Limited

• H

  • HBF Health Fund
  • HCF Health Insurance
  • Health Insurance Fund
  • HIH Insurance

  I

  • Insurance Australia Group

  M

  • Manufacturers Mutual Insurance

  N

  • Nib Health Funds
  • NRMA

  P

  • Progressive Corporation
  • Promina Group

  • Q

    • QBE Insurance

    R

    • Real Insurance
    • Royal Automobile Association
    • Royal Automobile Club of Victoria

    S

    • SGIC
    • SGIO (Western Australia)
    • Suncorp Group

    T

    • T & G Mutual Life Assurance Society
    • Travel Insurance Direct

    V

    • Vero Insurance