CHART OF THE WEEK

Technology focus of Australian insurtechs, 2018 vs 2019

Venture Insights welcomes David Kennedy

Venture Insights is pleased to welcome David Kennedy as the company’s Head of Research. David has over 25 years’ experience working with telecoms and media operators, regulators, governments and technology vendors in Australia and across the Asian region. His areas of interest include policy & regulation, technology trends, commercial strategy, and market analysis. Before joining Venture Insights, David worked as a senior researcher and consultant at Ovum, Knowledge Society, and the Department of Communications. He has a Science degree in physics and applied mathematics from Sydney University.

Broadcasters and sports rights on an unsustainable path

 Australian big 4 sports rights cost over time

Venture Insights believes that traditional Australian broadcasters will struggle to fund further increases to the cost of tier one sports as they continue to suffer from declining revenues in hyper-competitive markets. As such, premium Australian sports are likely to further split their rights, selling portions to non-traditional telco or tech players. In the long-run, Australian sports may even look at selling their content direct to consumer through ‘over the top’ distribution models. The recent round of sports rights deals has left us with three Australian sports generating over A$1bn in medium-term deals. This figure is high considering the declining revenues of broadcasters and the stagnating viewership numbers of some tier one sports. For a more detailed look at the current state of the Australian sports rights market, delve into the current struggle of traditional broadcasters, particularly Foxtel, and contemplate what’s next for the delivery of sports content, click through to read our report.

Vocus 1H20 update

Vocus Group divisional performance

Vocus’ 1HFY20 results indicate that the company is very much in the middle of a difficult transformation phase with decline in EBITDA of retail business offset by strong performance in its network services and New Zealand businesses. Vocus appears to be on track to achieve its three year transformation targets. Vocus’ Network Services generated EBITDA growth of 11% and recurring revenue growth of 5%. This was due to continued sales growth of international capacity on Australia Singapore Cable and positive momentum maintained in NBN services with Vocus highlighting key product launches for the period for productised SD-WAN, NBN Enterprise Ethernet and NBN Business Satellite. Interestingly, Vocus New Zealand stated that it would start to promote fixed wireless broadband later in 2020 through its wholesale mobile arrangement with Spark. For a more detailed look at the reported earnings and some of the key trends across its businesses, click through to read our report.  

UK Media consumption

Despite two decades of online disruption, the UK remains reliant on traditional platforms and brands across the media sector—more so for older cohorts, but also for younger generations. 13% of adults still do not use the internet and, in reality, an online-only media ecosystem remains a distant prospect. Traditional providers, particularly within TV, radio and news, look set to endure for the long term, aided by the trajectory of the UK’s ageing population. For a more detailed look at the media consumption in the UK, click through to read a report from our UK research partner, Enders Analysis.

Australian Insurtech Market Overview

Annual revenue of Australian insurance sectors, AUD billion

Australia’s insurtech ecosystem has expanded rapidly as the engagement of local and international incumbents through funding and partnerships has solidified the trend towards collaboration over disruption. Local insurtech revenues have also begun to rise, propelled primarily by growth in platform/ecosystem disruptors and the early traction of technical enablers; rising from ~$440 million in 2015 to ~$585 million by the end of 2019, which represents a CAGR of ~7.4%. Venture Insights predicts the insurtech sector is entering a growth phase; revenues are expected to grow at 13.9% p.a. between 2019 and 2024, to a size of $1.12 billion. Recent regulatory activity, such as the financial services Royal Commission, could prove to be a catalyst for structural deterioration of insurance industry premiums, affecting potential revenues of both incumbents and insurtech start-ups in the longer term. For a more detailed look at the insurtech market in Australia, click through to read our report.