Life insurance - Australia

Australia

The Life insurance market market in Australia is expected to reach a market size (gross written premium) of €21.36bn in 2024.
In the same year, the average spending per capita in the Life insurance market market is projected to amount to €0.80k.
Looking ahead, the gross written premium is forecasted to exhibit an annual growth rate (CAGR 2024-2029) of 1.10%.
This growth is anticipated to result in a market volume of €22.56bn by 2029.
When compared globally, it is worth noting that the United States is projected to generate the highest gross written premium, amounting to €1,195.0bn in 2024.
In Australia, there is a growing trend of younger individuals opting for life insurance policies to secure their financial future.

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Analyst Opinion

Over the past few years, the Life insurance market in Australia has been experiencing significant growth and development.

Customer preferences: Customers in Australia are increasingly seeking life insurance products that offer more customization and flexibility to meet their specific needs. There is a growing demand for policies that provide coverage for critical illnesses, disability, and retirement planning. Additionally, customers are showing a preference for digital channels for purchasing insurance and managing their policies, driving insurers to enhance their online platforms and digital capabilities.

Trends in the market: One of the notable trends in the Australian life insurance market is the rise of insurtech companies offering innovative solutions and disrupting traditional insurance models. These companies are leveraging technology to streamline processes, offer personalized products, and improve the overall customer experience. Another trend is the increasing focus on ESG (Environmental, Social, and Governance) factors, with more customers looking for sustainable and socially responsible insurance options.

Local special circumstances: Australia's aging population and increasing life expectancy are influencing the life insurance market dynamics. As the population ages, there is a greater need for retirement planning and long-term care coverage, leading to a shift in the types of insurance products being offered. Moreover, regulatory changes and government initiatives aimed at improving the transparency and affordability of insurance products are shaping the competitive landscape in the market.

Underlying macroeconomic factors: The overall economic stability and growth in Australia are supporting the expansion of the life insurance market. Favorable interest rates and a strong regulatory framework are encouraging insurers to innovate and introduce new products to cater to the evolving needs of customers. Additionally, the increasing awareness about the importance of financial protection and risk management is driving the demand for life insurance products across different customer segments.

Methodology

Data coverage:

Data encompasses B2B and B2C enterprises. Figures are based on gross written premium, gross written premium per capita, gross claim payments, loss ratio, and distribution channels.

Modeling approach / Market size:

Market sizes are determined by a Bottom-Up approach, based on a specific rationale for each market layer. As a basis for evaluating markets, we use industry associations, national statistic offices, and international organizations, such as OECD. Next we use relevant key market indicators and data from country-specific associations such as insurance consumer spending, gross domestic product, insurance - consumer price index (CPI), population growth. This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. For example, exponential trend smoothing and HOLT-linear. The main drivers are insurance consumer spending and insurance - consumer price index (CPI).

Additional Notes:

The market is updated twice per year in case market dynamics change. The impact of the COVID-19 pandemic is considered at a country-specific level.