One-fifth of Irish insurance firms planning to buy or merge
Published 03/10/2016 | 02:30
Nearly a fifth of Ireland's insurance leaders are planning to either buy a rival or merge with a competitor, according to a survey launched this morning.
The first ever Insurance Ireland-PwC Pulse Survey, which asked chief executives in the sector for their views, found that 18pc of the bosses think M&A activity is on the cards for them in the coming year.
And despite the major challenges facing the insurance sector here - particularly in relation to motor claims - the survey shows that 79pc of chief executives in the industry think there are more opportunities now for growth than there were three years ago.
The report is being launched this morning by IDA chief executive Martin Shanahan.
Of those surveyed, 69pc said that targeting business growth is the greatest focus in the year ahead, with 66pc noting that driving innovation was key for them in the coming 12 months. Almost half of the chief executives - 47pc - said they expected growth to come from existing markets.
Just over 80pc of the insurance bosses also cited over-regulation as their top concern in Ireland. Other issues denting their confidence are low interest rates, with 63pc saying it's a concern for them.
Insurance firms typically invest premiums received from customers to generate a return to help cover the cost of claims.
The low interest rate environment therefore poses a challenge for them.
Insurer FBD said during the summer that it had shifted €150m of investments to corporate bonds over the previous year due in part to the low returns offered by banks for term deposits.
Just over a third of the chief executives surveyed cited Brexit as a concern.
The survey was undertaken before the June vote.
"In the light of Brexit and potential added uncertainties, IDA Ireland has a huge focus on continuing to market Ireland as an insurance centre of excellence internationally," according to Mr Shanahan.
PwC partner Padraic Joyce said that insurers would also welcome moves in next week's Budget to provide incentives to skilled foreign workers to come to Ireland.
Kevin Thompson, the chief executive of industry group Insurance Ireland, said that despite the challenges facing the sector, new technologies are being employed by grow business.