Smaller companies boost car insurance competition
Rising competition from smaller players in the car insurance industry is causing a slower growth in premiums, new research shows.
KPMG's 2010 General Insurance Industry Survey found that Aussies can now call on a growing number of options when the come to compare car insurance, with companies unable to fully pass on the costs of severe weather and other high payout events as a result.
Commenting on the rise of the "smaller players", KPMG insurance partner Ian Moyser, said: "Whilst their level of penetration into the market is relatively low, the question is whether we are seeing a significant change in competitive dynamics in the personal lines market."
The study also found that despite the increasingly competitive marketplace, the Australian insurance industry as a whole remains relatively strong thanks to the improving economy and rising interest rates.
Indeed, the survey revealed that major insurers including Insurance Australia Group Ltd, Suncorp-Metway Ltd and QBE Insurance Group Ltd, performed well in the year to June 30th, despite severe weather in March.
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