Key Distribution Channels in Australia
3. Key Distribution Channels in Australia
In this section we look (briefly) at each of the key distribution channels in operation in
Australia today.
The following table presents a snapshot of the market currently and where its expected to be
in 15 years time. Based on an expected nominal growth rate of 8.4% p.a., the total risk
insurance market is projected to reach $33.6B p.a., compared to $10.0B at 30 June 2011.
When adjusted to 2011 dollars, this equates to a real growth of 5.3% p.a. with an annual
premium of $21.6B p.a.11
Agents formed groups (agencies) as they tried to gain scale for greater negotiating leverage.
These would negotiate agreements with a handful of insurance companies, including
commission write backs etc.
There was also product differentiation - there was the entry of Preferred Term, Universal Life
and Variable Universal Life. Preferred Term = blood tests, underwriting, 5 occupational
categories - sharper pricing.
In the UK and Canada, provision of estate tax has been a selling point for insurance. Not sure
that this is the case here.