In recent years, the insurance sector in Ireland has experienced a significant decline, with a sharp decrease in the number of insurance and reinsurance businesses. This decline is attributed to various factors such as regulatory pressures, limited new entrants, and a shifting perception of Ireland’s attractiveness as an insurance hub.
Urgent action is required to address the challenges faced by the sector, including regulatory burdens and talent availability, to ensure the preservation of Ireland’s position as a leading player in the European insurance market.
Decrease in the Number of Insurance Firms
The decrease in the number of insurance firms in Ireland since 2009 has been significant. According to recent data, there has been a 39% decline in the number of insurance and reinsurance businesses based in Ireland over the past decade.
Life companies have dropped by 42%, while non-life firms have decreased by 29%. Re-insurers have experienced the most substantial decline, with a decrease of 47%.
This trend is further exacerbated by the departure of some of the largest international non-life companies and one of the largest international life businesses from the country.
Several factors have contributed to this decline, including growing pressure on European Union cross-border business models and a lack of new entrants from outside the EU. Additionally, Ireland’s attractiveness as a location for insurers has diminished, as factors such as the availability of skilled labor, regulatory regime, and cost of doing business have scored poorly.
Urgent action is needed to address these challenges and prevent further regression.
Reasons for the Decline in the Insurance Sector
Due to various factors, such as growing pressure on European Union cross-border business models and a lack of new entrants from outside the EU, the insurance sector in Ireland has experienced a significant decline.
The perception of Ireland’s attractiveness as a location for insurers has changed, with factors that initially attracted insurers, such as EU membership, market access, and fiscal regime, now scoring poorly. Additionally, the availability of skilled labor, regulatory regime, and cost of doing business have become less favorable.
Challenges faced by the insurance sector in Ireland include the need to address the regulatory burden, improve availability of talent, and address the overall cost of doing business.
Urgent action is needed to avoid slipping backwards and to maintain Ireland’s future attractiveness as a location for international insurers.
Challenges Faced by the Insurance Sector
Despite the decrease in the insurance sector in Ireland, there are significant challenges that need to be addressed in order to ensure its future competitiveness.
One of the key challenges is the regulatory burden faced by insurance companies. The current regulatory regime is seen as burdensome and in need of improvement.
Additionally, there is a need to improve the availability of skilled talent in the industry. The perception of Ireland’s attractiveness as a location for insurers has changed, with concerns about the availability of skilled labor.
Lastly, the overall cost of doing business in Ireland needs to be addressed, as it is seen as a factor that now scores poorly. Urgent action is needed to avoid further decline and to maintain Ireland’s position as a hub for insurance in the EU.
Contributions of the Insurance Sector in Ireland
The insurance sector in Ireland makes significant contributions to both the economy and the government’s revenue. With approximately 35,000 employees, it plays a crucial role in providing employment opportunities. Moreover, the sector contributes over €2.7 billion annually to the exchequer, making it a vital source of government revenue.
Ireland itself is the fourth largest hub for insurance in the European Union, with 187 insurers and reinsurers located in the country. These insurers paid over €68 billion in claims last year alone. Additionally, the value of the insurance sector has grown from €73 billion in gross written premium six years ago to over €100 billion last year.
Given its economic importance, it is crucial to address the challenges faced by the sector to ensure its continued growth and competitiveness.
Importance of Addressing Competitiveness in Ireland’s Insurance Sector
With the insurance sector in Ireland experiencing a significant decline, it is imperative to address the competitiveness of the industry.
The decrease in the number of insurance firms in the country has raised concerns about Ireland’s future attractiveness as a location for international insurers. It is crucial to attract and retain international insurers and reinsurers to maintain the sector’s significant economic contribution through employment and contribution to the exchequer.
Additionally, the insurance sector plays a vital role in facilitating commercial activity. The challenges faced by the industry, such as the regulatory burden, availability of talent, and overall cost of doing business, need to be addressed urgently.
Conclusion
In conclusion, the insurance sector in Ireland has experienced a significant decline over the past decade. This decline is influenced by various factors such as regulatory burdens, talent availability, and the overall cost of doing business. The number of insurance and reinsurance businesses has decreased, raising concerns about the future of the sector. Urgent action is needed to address these challenges and maintain Ireland’s position as a hub for insurance in the EU. Ireland must find ways to revitalize its insurance sector and regain its attractiveness as a location for insurers.
