Things are looking good for the insurance brokerage business, after it earned its place among Australia’s top five growth industries for the next 12 months.
Business information research and analysis group IBISWorld predicted the industry’s revenue growth for the period would reach 7.2 per cent, coming third after organic farming and online information services.
IBISWorld has compiled its annual list of Australian industries set to fly and fall in the next financial year, forecasting Australia’s economic growth to arrive at 3.7 per cent.
Insurance brokerage is predicted to bring $11.2 billion in total revenue, with premium pricing set to rise rapidly as Australian insurance carriers strive to recoup underwriting capacity lost on recent investment activities.
This will result in substantial revenue growth for brokerage firms since brokers earn commissions on the size of the premiums written, according to IBISWorld general manager in Australia Robert Bryant.
“As brokers distinguish themselves from direct insurance sellers through a greater emphasis on advisory services and financial management, they will increase profitability and allow for both employment and wage growth,” said Bryant.
Organic farming will be the biggest winner in the next financial year as Australians consider the health benefits and environmental impacts of their food choices, while insulations services will be the biggest loser following the Federal Government’s scrapping of its Home Insulation Program.