Thinking of Buying an Insurance Business in Australia? Here Are 3 Vital Questions to Ask

Australia’s insurance brokerage industry generated $23.2 billion in revenue in 2025, with profits of $4.6 billion and a strong 19.6% profit margin, across 5,455 enterprises employing 21,825 people.

The industry has grown 6% annually over the past five years, supported by rising premiums linked to natural disasters, cyber risks, and reinsurance costs. Over the next five years, revenue is forecast to expand by 1.8% annually, reaching $25.5 billion by 2030, as brokers diversify into advisory and risk consulting services.

1. Is the Business Financially Sustainable Amid Market Consolidation?

Why It Matters:

The insurance brokerage sector has become increasingly concentrated, with a few large networks dominating market share. Financial strength depends on scale, access to insurer networks, and resilience to rising reinsurance and operational costs.

What to Check:

• Revenue base – The sector earns $23.2 billion annually, with projected growth to $25.5 billion by 2030.

• Profitability – Brokers achieve an average 19.6% margin, one of the highest in the financial services sector, aided by premium hikes following natural disasters.

• Market structure – The top three players—Steadfast (61%), AUB Group (27%), and The Envest Group (13%)—control nearly the entire market.

• Business size – Over 97% of firms are small operators with fewer than 20 employees, many operating as sole proprietors.

• Revenue drivers – Brokers earn commissions on premiums sold, which have risen sharply as insurers increase prices to offset reinsurance costs and climate-related claims.

2. Does the Business Have a Competitive Edge in Risk and Advisory Services?

Why It Matters:

Competition from direct insurers, banks, and insurtech start-ups is forcing brokers to evolve beyond traditional policy sales. The strongest performers are shifting toward value-added services such as risk consulting, claims management, and cyber coverage.

What to Check:

• Market trends – Cyber incidents are now the top risk globally, with only 70% of large firms and 20% of SMEs holding adequate cyber insurance coverage.

• Product diversification – Key revenue streams include commercial insurance (49%), private general insurance (30%), life insurance (14%), and health/advisory services (7%).

• Advisory services – Brokers specialising in complex risks like cybersecurity, trade disruption, and professional indemnity are achieving higher margins.

• Technology adoption – Major networks such as Steadfast and AUB are investing in AI-driven platforms like Steadfast’s INSIGHT system to enhance client analytics and policy customisation.

• Customer base – Commercial clients make up 74% of revenue, while retail clients account for 26%, showing a clear bias toward corporate insurance solutions.

3. Is the Business Prepared for Regulatory and Environmental Shifts?

Why It Matters:

Tighter regulation, higher climate risks, and digital disruption are reshaping the insurance landscape. Businesses that maintain compliance, transparency, and sustainability credentials are better positioned to attract clients and investors.

What to Check:

• Regulatory oversight – Brokers must hold an Australian Financial Services Licence (AFSL) under the Financial Services Reform Act 2001 and comply with ASIC’s Insurance Brokers Code of Practice.

• Consumer protection – The Australian Financial Complaints Authority (AFCA) governs dispute resolution, ensuring brokers act transparently and in clients’ best interests.

• Market scrutiny – The ACCC is reviewing commission models and merger transparency due to rapid broker consolidation and potential conflicts of interest.

• Climate exposure – Natural disasters have pushed up premiums and increased uninsurable regions, with 6% of Australian homes now classified as uninsurable due to flood and fire risk.

• Digital transition – Insurtech partnerships and automated platforms are helping smaller brokers compete with direct-to-consumer insurers.

Ready to Invest in a Thriving Insurance Business?

Australia’s insurance industry remains highly profitable, underpinned by strong demand for risk protection, climate adaptation, and cyber coverage.

With advanced digital tools, regulatory compliance, and a focus on high-value advisory services, brokers are positioned to lead the next evolution in risk management and insurance consulting.

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