Industry bodies

The main industry bodies are:

• Insurance Council of Australia [3] which represents general insurers.
• Financial Services Council
• Australian and New Zealand Institute of Insurance and Finance
• Underwriting Agencies Council http://www.uac.org.au
• Institute of Actuaries of Australia
• ACORD [4] which is the insurance industry global standards organisation. ACORD has standards for personal and commercial lines and has been working with the Australian General Insurers to develop those XML standards, standard applications for insurance, and certificates of currency.

Regulation

The prudential aspects of general and life insurance (solvency etc.) are regulated by the Australian Prudential Regulatory Authority (APRA). Matters relating to advice or disclosure of insurance products sold are regulated by the Australian Securities and Investments Commission (ASIC). The Australian Competition and Consumer Commission (ACCC) also has a regulatory role with respect to competition law.

In certain states, various bodies also have powers in regulating certain types of statutory insurance. For example, in New South Wales the Motor Accidents Authority [1] regulatesCompulsory Third Party motor liability insurance. In many cases these bodies have powers regarding premium rating and reinsurance rules.

Private health insurers are regulated by the Private Health Insurance Administration Council (PHIAC)[2].

The primary federal legislation is:

• Life Insurance Act 1995 (Life Insurance prudential regulation)
• Insurance Act 1973 (General Insurance prudential regulation)
• Health Insurance Act 2007 (Health insurance prudential regulation and consumer protection)
• Corporations Act 2001 ((especially Ch 7) consumer protection in respect of insurance policies)
• Insurance Contracts Act 1984 (consumer protection in respect of insurance policies)

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.

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 is owned by the Australian government.

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 $76,000 and do not have Private Health Insurance.

General insurers

The three large general insurer groups are:

• Insurance Australia Group (which includes NRMA, RACV, CGU, SGIO)
• Suncorp (which includes AAMI, GIO, APIA, Just Car, Bingle)
• QBE Insurance

Other insurers are:

• Allianz Australia
• Hollard Insurance (which includes Real Insurance,Guardian Insurance, Aussie, Australian Seniors)
• Budget Direct (which includes Virgin Money, Australia Post)
• Wesfarmers (which includes Coles)
• Calliden Insurance
• Zurich Insurance
• Youi Insurance
• Progressive Direct^[1]

Previous insurers include:

• Promina Group merged with Suncorp in 2007
• SGIO and SGIC purchased by IAG
• HIH Insurance collapsed in 2001

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.

Life insurers

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

• AIA Australia
• AMP Limited
• AXA
• Asteron Life (Suncorp)
• Allianz Australia
• MLC
• Macquarie Life
• OnePath (ANZ)
• TAL (previously Tower Australia)
• Zurich Australia

In addition, life insurance is also sold by friendly societies and credit unions.

Types of insurance

Life insurance

Life insurance products sold in Australia include term life insurance, disability income insurance. Australian insurers are unusual in providing a lump sum Total and Permanent Disability insurance. Life insurers also sell superannuation investment products.

Insurance in australia

Australia has a sophisticated and well-developed insurance market, which 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.