Insurance bosses in Ireland have highlighted declining profitability levels, rising claim costs and the challenge of Brexit as the chief threats to the industry here. The findings were part of an international survey of insurance CEOs by PwC.
Globally, the report suggested insurance firms were more concerned than those in any other sector about the combined threats to their growth prospects from over-regulation, the speed of technological change, changing customer behaviour and competition from new entrants.
In terms of disruptive technology, robo-advice and pay-as-you-go developments were cited as perhaps the biggest challenge.
Nonetheless, the survey suggested over a third (35 per cent) remained confident they can achieve revenue growth in the year ahead, but down from 44 per cent two years ago.
While Irish CEOs articulated may of the same concerns, financial pressures linked to the rising cost of claims was more pronounced, as was the challenge posed by Britain’s departure from the EU.
Claims costs
“Despite the much publicised challenges in the Irish market, most notably in relation to profitability and rising claims costs, from our experience with insurance clients in Ireland, the trends highlighted in this report are very similar here,” said
Paraic Joyce
, insurance partner with PwC Ireland.
“While business growth is the greatest priority, the sector is suffering from slim margins, and regulation around the cost of claims is a key challenge.
“ Concerns around key talent and international competitiveness are also priorities for the industry to enable further development of Ireland as an international centre of excellence for insurance.
“While Brexit looms large and will present opportunities for the sector, it is incumbent on us all to ensure that Ireland has the capacity for new insurers to locate here and to ensure that this is properly communicated,” Mr Joyce said.
