Delivery of a serious new player
The Age
Wednesday September 2, 2009
THE arrival of Australia Post in the car insurance market is akin to the postal operator parking tanks on the lawn outside former army commander Patrick Snowball's new "home" at Suncorp-Metway, where he rocked up for his first day yesterday. The move, along with the coincidental entry of Sir Richard Branson's Virgin Insurance into the sector, was another reminder of the increasingly competitive environment. Australia Post has certainly got a head start on its retail competitors. Channelling insurance through its network of 4450 outlets could see it pick up market share over time. What is also noteworthy is the role that international operators, like the South African insurers, are playing in helping brands such as Australia Post and Virgin become established. As "white label" sources, they provide the underwriting cover, the balance sheet strength and the administrative skills in managing claims. It's yet another challenge to the big insurers that have to do all that and more while trying to keep increasingly restless shareholders happy with higher profits. And for companies that have been financially scarred of late, such as IAG and Suncorp, one of the main ways to do that is to pass on higher premiums to customers to match the risks the companies are taking. But those prices are exactly the main line of attack for the new players.
© 2009 The Age