Four major insurers dominate the Australian general insurance market, which gives the appearance of choice with the offer of many brands, says the Productivity Commission in a report on competition in the financial system.
The four majors underwrite more than 30 brands while two of the smaller insurers underwrite 50 brands between them. One company underwrites 23 of 25 pet insurance brands.
In some areas of financial services, proliferation of products with slight variations in features has become a burden for providers as well as consumers, says the report.
The new Australian Financial Complaints Authority (AFCA) will take over the work of three external dispute resolution schemes and be able to consider claims of higher value when it comes into being in November, 2018.
AFCA will replace the Financial Ombudsman Service (FOS), the Credit and Investments Ombudsman (CIO) and the Superannuation Complaints Tribunal.
They hear disputes involving banking, credit, insurance, investment and superannuation. Members of these industries pay fees that fund the schemes.
Industry members of FOS and the CIO will have to retain those memberships for 12 minutes after AFCA opens its doors, so existing matters can be processed.
Comparison websites provide the convenience of being able to compare different products online, and many of us would assume what we get is the same as buying a bespoke service. When it comes to life insurance we’d be wrong.
Research by Rice Warner has found the commissions that insurers pay to life insurance websites is the same as that paid to qualified financial advisers who spend time assessing the consumer’s needs to come up with a tailored offer of cover.
Australia’s insurance industry had a better year in 2016 due to fewer bushfires, floods and other natural disasters.
The combined after-tax profit of 99 insurers and 10 reinsurers rose 20 per cent to $2.9 billion.
The insurance industry’s return on assets, in decline between 2012 and 2015, ticked up to 10.5 per cent from 8.7 per cent, according to figures from industry regulator the Australian Prudential Regulation Authority (APRA).