Despite the denials, many industry leaders still expect to see further consolidation at the top end of the insurers’ ranks. Industry executives at last week’s National Insurance Brokers Association Convention in Perth say it’s inevitable.

In a panel session on the last day of the convention, Jardine Lloyd Thompson MD Brian Carpenter said underwriter consolidation in the next two years is just about a dead cert. “I was in Europe last week and the rumours were everywhere,” he said. “They reckon out of the big three there will only be a big two.”

Wesfarmers Insurance division CEO Bob Buckley said he would consider more acquisitions but not right now, thanks. “At times you can grow, and at other times it is best to forgo growth for responsibility.”

KPMG Insurance Partner Andries Terblanché told Sunrise Exchange News he wouldn’t rule out any consolidation – whether in the top five or anywhere in the other 109 insurers operating in Australia.

“It always makes sense to be bigger. The wider you spread your risks the lower your capital needs to be and the less volatile your earnings would be. There are 109 Australian Prudential Regulation Authority-licensed entities competing for 20% of market share. Competition must be intense.”

He said underwriters are now more disciplined and trying different ways of gaining market share. “Insurers are less one-dimensional and keen to differentiate themselves through service delivery when a claim is made.”