Aussie insurance broking primed for rapid growth

Aussie insurance broking primed for rapid growth

Aussie insurance broking primed for rapid growth

Thanks to the increasing importance of brokers in insurance for SMEs, the Australian commercial insurance broking market will accelerate in growth in the years leading up to 2016.

Countries outside of North America and Europe are expected to see their share of global commercial non-life insurance broking revenues grow from 20.2% to 23.4%, according to financial services market research company Finaccord.

It estimates that the value of the global market for commercial insurance broking revenues will further increase to US$55.43billion in the years leading up to 2016. This is up from the $46.26bn Finaccord predicts for 2012.

But North America’s share within the global total is likely to decline slightly to 50.1% and Europe’s share is expected to experience a sharper drop from 29% to 26.6%.

“Brokers dominate the distribution of commercial lines in Australia […] among other countries. Crucially, they also account for a rapidly rising proportion of the market in China and India,” said Finaccord consultant, Bernd Bergmann.

Finaccord also carried out detailed analyses of the leading commercial lines brokers in each of the 30 markets investigated. Aon and Marsh are by far the largest players in global commercial non-life insurance broking with Aon estimated to account for about 13% of global revenues ahead of Marsh with 11% and Willis with 3%.

Across the 30 countries surveyed by Finaccord, Aon was found to be the market leader in commercial lines broking in 16 countries ahead of Marsh which was the largest in eight. Meanwhile, Finaccord identified six countries in which neither of these two international groups was market leader. The six markets in question were Austria, China, Denmark, France, Portugal and Switzerland.

“Due to their frequent acquisitions, both Aon and Marsh tend to grow faster than the overall market in most countries. However, outside of the major markets, the pool of viable acquisition targets can often be limited. In future, it is reasonable to expect that Aon and Marsh will continue to grow their share of global commercial lines broking revenues but that some of that growth will have to be achieved organically,” Bergmann added.