Major general insurers will continue to dominate the Australian market over the next five years, but customer-connected entrants such as Google and Amazon may start to make inroads, according to a new report.

Ibisworld’s General Insurance in Australia paper says the industry is “ripe” for disruption by technology companies.

There have already been moves on the industry by Google, whose Compare Auto Insurance Services has operated in the UK since 2012, although it is due to close this week. In February last year the web giant also acquired a licence to sell car cover on behalf of insurers in 26 US states.

Ibisworld says the gap between the biggest insurers and the rest is growing, as the majors pursue growth through acquisitions.

“The three largest insurers have a history of aggressive expansion through acquisitions and mergers, and this is expected to continue over the next five years,” the report says.

This could lead to stiffer price competition and increased policy coverage, with small and medium players worst-affected by the competition.

“Because the larger insurers are better capitalised, they are better placed to add further coverage on top of existing policies, and can bear higher pricing risks.”

IAG leads Australian insurers with 21.9% market share, followed by Suncorp on 17.1%, QBE on 9% and Allianz on 8.1%.

Industry revenue is forecast to have risen at an annualised 1% to $57.9 billion over the years to 2015/16, while investment markets are expected to strengthen as the local and global economies grow.

Interest rates are projected to rise over the next five years, lifting investment income, and annual premium revenue is predicted to rise.

Industry revenue is forecast to grow at an annualised 3.5% over the five years to 2020/21, to reach $68.8 billion.