Life insurance plays a vital role in financial planning for Australians, providing financial protection for loved ones in the event of death, disability, or illness.
The Australian life insurance market is highly competitive, with a number of large and well-established insurers offering a wide range of products and services.
The Australian life insurance market is undergoing a period of consolidation, with a small number of large and well-established insurers accounting for the majority of market share. This consolidation is being driven by a number of factors, including the increasing complexity of the regulatory environment, declining new business volumes, the need to invest in new technology, and the desire to achieve greater scale and efficiency.
Life insurer premium market share in 2023
The latest data on Australian life insurers by market share is explored in an interactive visual below.
Largest Australian life insurers
The five largest insurers account for over 83% of the Australian life insurance market.
1. TAL Life
Market share: 34%
Annual premiums: $6.2 billion
TAL Life is the largest life insurance company in Australia, with a market share of 34%. TAL is a subsidiary of Dai-ichi Life, one of the largest life insurers in the world. TAL has grown significantly since its acquisition by the parent company in 2011. Formerly known as Tower Australia, TAL has expanded its portfolio through strategic acquisitions. In 2019, it acquired Asteron Life from Suncorp, and in 2022, TAL completed another major acquisition, BT Life from Westpac.
2. AIA Australia
Market share: 17%
Annual premiums: $3.0 billion
AIA Australia is a subsidiary of AIA Group, the largest pan-Asian life insurance group. AIA Australia acquired the CommInsure portfolio in 2019. AIA has recently begun to expand beyond just life insurance. They also offer health insurance products and have invested heavily in their health and wellbeing program called AIA Vitality. This program rewards individuals who maintain a healthy lifestyle, promoting overall well-being.
3. Zurich Australia
Market share: 15%
Annual premiums: $2.6 billion
Zurich, the Australian subsidiary of Swiss industry giant Zurich Group, acquired Macquarie Life in 2016 and rebranded their plans as Zurich life insurance policies. In 2017, Zurich announced the acquisition of ANZ Bank's life insurance arm, OnePath. The transaction was finalised in 2019, and since then, Zurich has been selling life insurance policies under both the Zurich and OnePath brands.
4. MLC Life Insurance
Market share: 10%
Annual premiums: $1.9 billion
MLC is co-owned by Nippon Life, a Japanese insurance company with an 80% stake, and the National Australia Bank (NAB), which holds the remaining shares.
5. Resolution Life
Market share: 7%
Annual premiums: $1.3 billion
Resolution Life, a UK-based specialist manager of legacy insurance businesses, acquired the life insurance unit of AMP Limited in 2018. Following the acquisition, Resolution stopped issuing new AMP policies, reflecting their in-force specialist business model. In 2022, Resolution Life acquired the remaining equity interest in Resolution Life Australasia from AMP.
Insurer consolidation
The Australian life insurance market has been undergoing a period of consolidation in recent years, as insurers have sought to achieve greater scale and efficiency. This trend is expected to continue in the coming years, as insurers face increasing competition from both domestic and international players.
There are a number of factors driving the consolidation of the Australian life insurance market. The first is the increasing complexity of the regulatory environment coupled with declining new business volumes. Insurers are required to comply with a range of complex regulations, which can be costly and time-consuming. Larger insurers are better equipped to meet the costs and challenges of regulatory compliance, particularly in the face of lower sales.
Another factor driving consolidation is the need to invest in new technology. The life insurance industry is undergoing a digital transformation, as insurers seek to improve their customer experience and reduce their operating costs. Larger insurers are better able to invest in the new technologies required to meet the changing needs of their customers.
Finally, consolidation is also being driven by the desire to achieve greater scale and efficiency. Larger insurers are able to spread their costs over a larger base, which can lead to lower costs per unit. They are also able to leverage their scale to negotiate better deals with suppliers and reinsurers.
This consolidation has several implications for the market:
- It is increasingly difficult for smaller insurers to compete, particularly recognising the costs of regulatory compliance, investments in new technology, and achieving the scale and efficiency required to be competitive.
- Ongoing consolidation has led Australia to become the most concentrated market amongst developed peers. This may lead to higher prices and reduced choice for consumers in the long term. However, it could also lead to greater innovation and efficiency, as insurers compete to attract and retain customers.
Conclusion
Overall, the Australian life insurance market is expected to continue to grow in the coming years, but it is also facing a number of challenges. It remains to be seen how the consolidation of the market will impact consumers in the long term.
Data sourced and adapted from APRA's Life Insurance Claims and Disputes Statistics, licensed under the Creative Commons Attribution 3.0 Australia Licence.
