PwC and Insurance Ireland today launch their Insurance Leaders' Survey 2021 highlighting the views and priorities of Irish insurance leaders across all major classes of insurance. With 94 responding Irish insurance leaders, the report benchmarks key trends, challenges and opportunities in the industry as the economy cautiously reopens following more than a year of the greatest disruption in our generation.
Key findings from the survey include:
Minister for Finance for Ireland Paschal Donohoe said: "A stable, well-functioning and competitive insurance industry is key for Ireland as we continue on our road to recovery from COVID-19 pandemic. The sector is an important element in maintaining the momentum of the recovery and in turn helping restoring sustainability to Irish public finances. The PwC-Insurance Ireland Leaders' Survey 2021 illustrates that the economy is rebounding and that the sector is facing up to changes in its operating environment. Meeting these challenges shows the need for the industry to work collaboratively with the Government to progress the reform agenda and bring benefits to consumers, businesses and providers alike".
The survey reveals an insurance industry that is rebounding with certainty and resilience, but not without its challenges. Poor investment performance (65%) due to low or negative interest rates and regulatory challenges (59%) continue to be key macro-risks. Other key business challenges include the availability of key talent and skills (45%, up from 24% last year), digital transformation (45%) and adjusting to the new ways of working (43%). Cyberthreats have escalated (45%, up from 15% last year).
The industry is planning to tackle many of these issues head on with significant investment step-ups. Key areas for significant investment over the next three years are digital transformation (55%), cybersecurity (32%) and sustainability (30%). In addition, as the industry adjusts to the new ways of working, significant changes to workforce strategies are on the agenda including hybrid working, diversity and inclusion, talent and leadership and productivity through automation.
Greater leveraging of technologies is an area of real opportunity for the insurance industry. Greater use of data analytics to add value and using robotics or robo advice and chatbots to deliver tailored, on-demand insurance and address changing consumer habits. Over two thirds (69%) of respondents are of the view that the Irish insurance industry has not responded sufficiently to changing consumer purchasing habits and means of engagement, such as across digital and mobile platforms.
John O'Leary, Insurance Leader at PwC Ireland said: "With plans for the lifting of many of the remaining COVID-19 restrictions in the next two months, we expect to see an insurance sector adapting to a new working environment. As an industry, remaining competitive is critical. The survey highlights significant investment in digital transformation and workforce strategies that will bring efficiencies in a world where consumer purchasing habits are rapidly changing. Greater leveraging of technologies is an area of real opportunity for the insurance industry and, with significant investment in digital transformation underway, it looks like this will become a reality".
The transition towards a more sustainable economy and society is identified as a top priority to address the challenges facing current and future generations. Over three quarters (77%) said that sustainability is high or moderately high on their strategic planning list.
30% of respondents stated that their organisation is planning to invest significantly in sustainability and ESG initiatives over the next three years. One in five (21%) have issued a product specifically targeting the ESG aware consumer already, with a further 36% currently in the process of issuing one. While sustainability is already high on the strategic agenda, more concrete action is needed to translate this into product development, investment strategy/opportunities and to fully leverage the socio-economic role of the industry.
Competitiveness and the attractiveness of Ireland as a place to do business (51%) remains central for the industry and should be the number one government priority, according to the survey. Continuing to address the domestic challenges i.e., the cost of claims (34%) and improving Ireland's national and cybersecurity infrastructure (30%) are also top Government priorities. 36% of Ireland's insurance leaders are urging the Government to prioritise the competitiveness of Ireland's corporate tax regime as international pressure mounts on our 12.5% corporate tax rate (up from 9% two years ago).
Moyagh Murdock, CEO of Insurance Ireland concluded: "The survey confirms that Ireland's insurance industry is committed to a strong recovery and growth agenda. The industry is also committed to investing in jobs and digital technologies. There is also a strong emphasis and commitment in relation to climate action and the development of more sustainable ways of conducting business on behalf of our customers. Having adapted well to the COVID-19 disruption, the industry is confident about the future. Nonetheless, we are dependent on a regulatory environment which facilitates competition in the Irish market, as well as Ireland's competitiveness at European and global level".
The survey was undertaken in July-August 2021 having 94 participants amongst Ireland's leading insurers representing international as well as local insurance companies and all classes of insurance. The sample included 40% international only players, 32% domestic only players and 28% international and domestic players.
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