Major consultancy, EY is predicting further industry shifts with respect to the Australian insurance sector next year, together with further superannuation fund consolidation.
In a range of predictions of how 2019 will play out for the financial services industry, EY has pointed to the impacts of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry but has also pointed to a continuation of trends which are already on-foot.
It suggested that non-regulated financial services players may find opportunities for growth while the major incumbents seek to get their act together in the wake of the changes likely to be recommended by the Royal Commission, while cautioning that all sectors of the industry will be under greater scrutiny.
It said that the major incumbents were likely to be focused on regaining trust and getting back to basics, but that opportunistic new entrants should expect to be caught up in the higher levels of regulatory uncertainty.
Looking at the financial services sector more broadly, the EY analysis noted that there had been higher levels of transaction activity in the past 18 months and this was likely to continue for at least another six to 12 months.
“This will result in a significant shift in the major players in the industry – particularly in life insurance which is experiencing a ‘back to the future’ moment, as banks move out of the sector and pure play insurers become dominant once more,” the analysis said.
“There will also be further consolidation in the superannuation sector, as funds face continued pressure to justify their performance and member returns.”