Australian general insurers’ growth rate should rise over the next five years, according to analyst Ibisworld.

In a report on the industry it puts annual growth between 2010 and this year at 0.8%, reaching a revenue total of $59.5 billion.

Over the next half-decade the forecast rate is 3.9%, with revenue reaching $72.2 billion by 2020.

Senior Industry Analyst Sebastian Chia told insuranceNEWS.com.au the relatively low current rate is partly due to a high base year in 2010.

“Investment returns had just bumped up after the financial crisis,” he said.

“There was also very strong premium growth during that period, but we do not see that happening over the next five years.

“It will still grow but at a much slower rate, while investment returns are expected to rise.”

Acquisition activity is expected to continue, despite large companies “having already acquired many of the industry’s minor players”.

Stiff competition is expected to place downward pressure on profit margins, and online aggregators have disrupted the market and forced a greater focus on price.

“Insurers are also feeling the heat from large internet-based companies such as Google and Amazon,” the report says. “These companies have been pushing into the online payments space and have shown an ability to quickly enter and upend new markets.”