16 Jul 2020
Posted in Insurance
Australia’s top insurance players should be shielded from risky life insurance segment, says GlobalData
The non-life-dominated Australian insurance sector’s top 10 players should be less exposed to the soaring COVID-19 claims, compared to other countries that are more dependent on the life segment, according to GlobalData, a leading data and analytics company.
Five of the top 10 Australian insurers are exclusively life and the remaining five are 100% non-life, in terms of premiums. However, the top four providers in the country are all non-life. This is a stark contrast to most countries around the world, where life insurers dominate the top 10 players.
Deblina Mitra, Insurance Analyst at GlobalData, comments: “The top 10 insurers generate 71% of their business from non-life, while the remaining 29% comes from life. Life insurers are vulnerable due to an expected rise in claims due to COVID-19 and difficult conditions for investment.”
GlobalData written premium data shows the non-life sector in Australia is concentrated within the top 10 leading players.
Mitra concludes: “The top 10 insurers corner 80% of the total non-life insurance business, this exposes them to an expected spike in claims in the segment. A fall in retail sales and the resulting bankruptcies put pressure on the trade credit lines. The leading trade credit insurers are reported to have stopped issuing new products. Other key lines, such as property and motor should see claims decline as more people are working from home.”