Submission to Competition Policy Review
10 Jun 2014
Insurance Australia Group (IAG) welcomes the opportunity to make a submission to the Competition Policy Review.
All sectors of the economy should be subject to competition unless there is a net public benefit not to do so. Any legislative or regulatory intervention must not prevent organisations, whether they are large or small, from engaging in legitimate competitive behaviour.
The general insurance industry is highly competitive, and serviced by a large number of insurers. It is also characterised by low barriers to entry, particularly in the retail short tail classes of insurance such as home and motor vehicle insurance. This competition has been increasing in recent years with additional competition from foreign insurers, other financial services providers such as banks and large retailer groups entering the market.
Within this highly regulated and competitive general insurance market, any potential increase in regulations must be very carefully considered and weighed up against their potential to add further compliance costs on the industry. IAG also cautions against legislative and regulatory intervention, no matter how well intentioned, that has the potential to unduly inhibit market forces.