If I were to ask most Australians this question, I think their answer would be 15 or 20 at the most. But in fact, there are more than 70 car insurance companies that offer car insurance to Australian drivers. Many of these insurers are owned or, more importantly, underwritten by the same company, meaning many policies and products are nearly identical. I’ve rambled in many of my previous articles on the importance of the underwriter in making a proper comparison, so I won’t go into detail, but of those 70 insurance companies, there are probably only 15-20 underwriters.
So how can so many insurance companies survive? Some do it through innovative products, some do it with cheap prices, some have been selling insurance in Australia for many years and have built a reputation as a strong car insurance brand and some are able to tap into large customer bases to sell. insurance and charge a commission. for your problems.
There are five main types of companies that carry their own brand name car insurance;
1- Companies that have been doing business in the Insurance Industry for years (ie CGU, Allianz, AAMI, RACV)
2- Companies offering innovative non-standard auto insurance products and features (i.e. cashback, youi, PAYD, Bingle, LSV, Dawson, Famous, Shannons)
3- Companies abroad (Budget Direcr, Real Insurance, Progressive Direct, eCar)
4- Finance companies with a large consumer base to potentially sell insurance to (i.e. ANZ, Commonwealth, Westpac, NAB and Bankwest)
5- Non-financial companies that can leverage their large customer base or are a company that trades in a related good. Examples here include Beaurapaires (typically a tire dealer and manufacturer) and Australia Post (they have millions of customers).
Is it a good thing that there are so many companies to choose from? Definitely! The choice is good for consumers and the Australian car insurance market has opened up significantly in the last 5 years. More choice means more competition from insurance companies, which means they have to work harder and harder to get your business, which usually includes lower prices. Car insurance comparison sites would further increase competition, but so far it has been difficult due to the reluctance of the main player to participate; but some websites are emerging that help consumers make a better choice.
So the next time you need car insurance and you’re thinking you have a small variety of options, think again! There are plenty of car insurance companies in Australia desperate for your business and by shopping around it’s not uncommon for you to save hundreds of dollars.