Aust life industry eclipses rivals

Australia’s life insurance industry is more than five times as big as its next biggest rival competing to be recognised as the region’s financial services hub

Australia’s life insurance industry is more than five times as big as its next biggest rival competing to be recognised as the region’s financial services hub.

According to Asiaweek magazine, annual premium income for Australia’s insur-ance industry dwarfs that of Singapore and Hong Kong.

The magazine estimates Australia’s premium income at $US29.2 billion, compared to Hong Kong’s $US5.4 billion and Singapore’s $US3.3 billion.

While the gap was not so wide, Asiaweek also says Australia’s banking industry is bigger than its two biggest regional rivals. Austrlai’s banks have assets of $US560 billion, compared to Hong Kong’s $US 398 billion and Singapore’s $173 billion.

Axiss Australia managing director Les Hosking, the man responsible for Austra-lia’s ambitions to become a global financial centre, says the size of the two sectors was a key plank in the group’s efforts to promote Australia as the hub.

“The ‘agglomeration effects’, that is the critical mass of players in a certain finan-cial sector will attract related industries, and in turn attract other financial players into our country,” he says.

“Our large banking and insurance companies for example have been attracting fi-nancial IT companies, such as IBM, Oracle, Cisco and Nortel to expand their op-erations or to establish their Asia-Pacific headquarters in Australia.

“In turn, our IT infrastructure and wider financial skills base due to the large do-mestic financial sector is attracting other regional financial operations to be estab-lished in Australia.”

Companies that Axiss claims as proof of this effect include Citibank, Zurich Fi-nancial Services, Alliance Capital, Rabobank, Goldman Sachs, Morgan Stanley Dean Witter, Royal Bank of Canada and Lehman Brothers.