Insurance Services
Insurance in Australia
Australia’s insurance market can be divided into roughly three components: life insurance, general insurance, and health insurance. These markets are fairly distinct, with larger insurers focusing on only one type, although in recent times several of these companies have broadened their scope into more general financial services and have faced competition from banks and subsidiaries of foreign financial conglomerates. With services such as disability insurance, income protection and even funeral insurance, these insurance giants are stepping in to fill the gap where people may have otherwise been in need of a personal or signature loan from their financial institution.
Types of insurance
Life Insurance
Life insurance products sold in Australia include term life insurance and disability income insurance. Australian insurers are unusual in providing lump sum total and permanent disability insurance and trauma (critical illness) insurance. Life insurers also sell superannuation investment products. Most life and related insurance is taken out through superannuation funds. Life insurance premiums paid by a superannuation fund are tax-deductible by the fund from assessable income; while the same premium if paid directly by the individual member may not be tax deductible.
Some insurance companies also offer funeral insurance, accidental death and accidental injury policies. The Australian Securities & Investments Commission recently questioned the value of some of these policies and the methods used to sell them.
General insurance
General insurance products sold in the Australian market can roughly be divided into two classes:
- Liability insurance: such as compulsory third party (CTP) motor insurance, worker’s compensation, professional indemnity insurance and public liability insurance.
- Business insurance: Property insurance such as home and contents insurance, travel insurance, and comprehensive motor vehicle insurance
Provisions applying to statutorily mandated or regulated schemes, such as CTP and workers’ compensation, may differ considerably between states.
Many of Australia’s largest companies and governments self-insure partially or totally. There are dedicated government insurers who cover these functions in many states.
Travel Insurance
Regulated by the Australian Prudential Regulation Authority (APRA) under the Commonwealth Insurance Act 1973. The Government of Australia website Smartraveller recommends “Take out comprehensive travel insurance and ensure it covers you for the places you’ll visit, things you’ll do and any pre-existing conditions.”
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