Assessing the Impact of Market Consolidation on Australian Insurance Competition

Currently, four major companies—Insurance Australia Group (IAG), Suncorp, QBE, and Allianz—control approximately 74% of the general insurance market. This concentration has sparked discussions about the potential implications for competition and consumer outcomes. The Australian Competition and Consumer Commission (ACCC) has noted that despite government interventions designed to attract new insurers, no new entrants have emerged in high-risk markets, and existing insurers show limited appetite to expand their exposure.

For tradespeople, a less competitive market can result in higher premiums and fewer options for tailored coverage. The lack of competition may also lead to complacency among insurers, potentially affecting the quality of service and responsiveness to claims.

Research published by the Actuaries Institute in 2025 found that price optimisation effects are influenced by market competitiveness, with effects becoming less pronounced in more competitive environments. In less competitive markets, insurers have more scope to use behavioural pricing techniques that extract value from loyal customers rather than pricing purely for risk.

To navigate this evolving landscape, tradespeople can consider the following strategies:

• Regularly Review Policies: Periodically assess your insurance coverage to ensure it remains competitive and meets your business needs.
• Leverage Broker Services: Engage with insurance brokers who can provide access to a broader range of products and negotiate better terms on your behalf.
• Advocate for Transparency: Support initiatives and policies that promote transparency in pricing and encourage competition within the industry.
• Stay Informed: Keep abreast of industry developments and regulatory changes that may affect your insurance options and costs.

By taking proactive steps, tradespeople can better position themselves to secure affordable and comprehensive insurance coverage in a consolidating market.