In Australia insurance markets and risk transfer arrangements are well developed. There is also a large superannuation and wealth management sector, and retirement products are particularly important to many financial institutions. All financial services are highly regulated, with an emphasis on good governance and risk management.
Both the Life and General insurance markets feature major global insurers and re-insurers as well as large domestic and some smaller specialist companies. General insurance markets are distinguished by exposure to a particularly wide range of catastrophe exposures and the state-based regulation of most compulsory classes.
The retirement system involves a compulsory employer-funded defined contribution of 9.5%, with grandfathering of legacy defined benefit arrangements. Contributions are paid to, and invested by, superannuation funds some of which are sponsored by financial services institutions while others are not-for-profit (mutuals). There is scope for employers and individuals to make additional provision for retirement through superannuation, but since contributions and investments enjoy tax advantages there are limits on this. The Government provides a means-tested age pension as a safety net.