Irish international insurers more confident than 3 years ago - survey
 

Three quarters of international insurance leaders based in Ireland see more growth opportunities in the current market than three years ago, with 85 per cent confident about their business growth in the next year according to a PwC survey carried out amongst Dublin International Insurance & Management Association (DIMA) members and launched at the 2015 European Insurance Forum.

The single greatest growth opportunity is expansion in existing markets with product innovation identified as the second biggest opportunity amongst the insurance leaders.

In a sector that is seeing strong merger activity with XL acquiring Catlin, and the planned acquisition of Partner Re by Axis (with Italian investor Exor making a rival bid for Partner Re), amidst record low interest rates and fierce competition it is not surprising to see that 20 per cent of Irish international insurance leaders see tie-ups via a joint venture, strategic alliance or M&A, up from 13 per cent last year.

The biggest challenge facing international insurers is, unsurprisingly, Solvency II, with it identified as the biggest challenge by 60 per cent of insurance leaders - the directive comes into effect on 1st January 2016 (a date that has been pushed out on numerous occasions as the industry and regulators grapple with implementing/complying with the new rules, which were outlined back in 2009.) Other challenging areas for the insurance leaders are the availability of key talent (27 per cent) and leveraging data analytics (or Big Data) (23 per cent).

Almost nine out of ten Irish re/insurance leaders say industry regulation is the greatest disruptor. Nearly two-thirds are concerned about disruption from changing customer behaviours (64%) and distribution channels (61%) and over half are concerned about the increase in the number of significant competitors (58%) and changes in core technologies (52%). Ensuring Ireland remains competitive (61%) is the top Government priority for insurance leaders to achieve their growth plans. According to the survey, other Government priorities should be the availability of key skills (43%), promoting Ireland as a centre of excellence for insurance (43%) and resourcing/supporting skills in the Regulator (29%).

Another area of concern is preparedness for the OECD's Base Erosion and Profit Shifting (BEPS) initiative, with one third of respondents stating they are not prepared.

'The OECD BEPS project will be a driver for international insurance and reinsurance groups to review their operating models and the location of key personnel said PwC Insurance Tax leader John O'Leary, who argued that for many reasons Ireland was ideally positioned to benefit from this trend and many groups will be encouraged to expand even further the high value activities they have located in Ireland.