Pictured at the launch of the 2017 Insurance Ireland PwC CEO Pulse report 'Fit for Growth' are (l-r): Frank Mee, Deputy CEO, Alliance Worldwide Care; Sylvia Cronin, Director of Insurance Supervision, Central Bank of Ireland; Fiona Muldoon, CEO, FBD and Ronan Mulligan, Insurance Partner, PwC.
The 2017 Insurance Ireland-PwC CEO Pulse Survey, published today, highlights key industry trends showing emerging industry confidence, a focus on innovation and insurance technology, but some concern over the challenges posed in realising Brexit-related insurance opportunities.
Looking at the year ahead, 67% of Insurance CEOs surveyed said that they are confident of business growth with a further 23% very confident. This is manifested in the respondents’ plans for workforce expansion with 63% planning on expanding their workforce, including 30% of CEOs planning workforce expansion of between 5 - 20%.
The General Data Protection Regulation, going into effect in May 2018, is the top business disruptor according to nearly three out of four respondents (70%). Other key business disruptors are changes in distribution channels (67%) and changes in core and emerging technologies including InsurTech.
These trends are also seen as opportunities, with an increase in the perceived opportunities presented by emerging technologies, such as data analytics, artificial intelligence and robotics. 87% see the value of data analytics compared to 70% last year; half see the opportunities presented by artificial intelligence compared to a third last year and 43% say robotics and automation will bring opportunities compared to just 20% last year. One in two also see the value of InsurTech.
The role of innovation, including the utilisation of insurance technology, is increasingly evident with CEOs seeing the value including the use of personal health devices and home technologies. The utilisation of these technologies is primarily being driven by operational efficiency, customer demand and competition.
The top challenges for the Irish insurance industry right now are over-regulation (70%), cyberthreats (66%) and skills availability (53%), although globally these challenges are of much greater concern. Over a quarter (27%) of Irish respondents admitted to having experienced a cyberattack in the last few years. Nearly three-quarters (73%) reported that the Irish regulatory regime, as an international insurance centre, is more demanding when compared to other EU territories. The most competitive international regulatory regimes relative to Ireland were noted as Luxembourg, Bermuda and Frankfurt.
Although nearly two-thirds (63%) see it as a business disruptor, some recognise Brexit is an opportunity with 26% of respondents whose companies have UK operations saying their organisation is considering relocating some or all of their operations to Ireland. The respondents did note challenges to realising Brexit-related opportunities in the form of regulation, infrastructure/accommodation, high personal tax and the availability of talent.
According to the survey, the top Government priorities should be maintaining the competitiveness of our corporate tax regime (60%); ensuring Ireland remains competitive including wages and rates (53%) and reducing our personal tax regime (37%).
Commenting on the survey results, Kevin Thompson, CEO of Insurance Ireland stated: “Insurance in Ireland has undergone significant changes in recent years but these findings show a sector keen to expand through investing in staff and new innovative capabilities to meet customer needs. It is also clear that Ireland is also in the frame for Brexit-related investments which can enable our continued growth as an international hub for insurance and sustain the 28,000-people employed directly and indirectly in the sector. Insurance Ireland is working with the Government and others, to address policy challenges and ensure the sector realises the opportunities available.”
Ronan Mulligan, Insurance Partner, PwC, said: “One of the key aims for insurers is to be fit for growth and the survey highlights that improving efficiency and competitiveness is top of mind for Irish insurance leaders. The survey highlights that data analytics, artificial intelligence and automation are key levers for insurance firms to become even more competitive. And, as a small open economy, remaining competitive while increasing market share will be critical for Ireland in the light of Brexit and as we continue to grow our international insurance centre of excellence.”
Darren O’Neill, Data Analytics Partner, PwC, added: “Following an extended period of relative turbulence and volatility, insurers are now better positioned to look to the future. Investing in capability to improve competitiveness and customer experience and address the challenges that disruption and technology innovation will bring should be a key focus. Organising and accessing both internal and external data to derive insights should be high on the change agenda. Leveraging data as a strategic asset can help insurers develop new and improved proxies for risk pricing and selection as well as deliver greater insights into customer behaviour.“
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