Ireland’s Insurance Sector employs 35,000 and contributes over €2.7 billion to the Exchequer annually
- Report by Milliman shows that Ireland’s insurance market continues to grow but there are indications that Ireland's attractiveness as a location for international insurance companies is declining
- Milliman report launched at European Insurance Forum Conference in Dublin Castle
Issued 12 October, 2023. A new report by consulting firm Milliman, commissioned by Insurance Ireland and launched at today’s European Insurance Forum 2023 in Dublin Castle, shows that the insurance industry plays a central role within the Irish economy and makes a substantial contribution both socially and economically.The sector employs some 35,000 people in skilled and well-paid jobs and contributes in excess of €2.7 billion annually to the Irish Exchequer. Ireland is the 4th largest insurance hub in the EU and one of the most important reinsurance centres globally.
Insurers based in Ireland paid more than €68 billion in claims in 2022 and help to safeguard the financial future of customers through some €300 billion of life and pensions assets.
As of August 2023, there were 187 insurance and reinsurance companies based in Ireland. Measured by gross premium income, the overall industry has grown considerably in recent years – from €73 billion in gross written premium in 2017 to over €100 billion in 2022.
The report shows that Ireland’s insurance industry is not solely focused on the Irish market and Irish policyholders, Ireland also has a substantial number of “cross-border” insurers who are based here but whose policyholders are located elsewhere, whether in the European Union or beyond.The international insurance industry in Ireland can trace its roots back to the establishment of the International Financial Services Centre (IFSC) in the late 1980s.
However, according to the report, in recent years, other than those who relocated here due to Brexit, there have been very few insurance companies established in Ireland.The Milliman report shows that the number of insurance and reinsurance undertakings based in Ireland has been on a downward trajectory since the peak in 2009.Overall, the number of entities has reduced by 39% since then, with the number of life companies down 42%, the number of non-life companies down 29%, and the number of reinsurers down by 47%.In addition, both the largest international non-life company and one of the largest international life companies have announced their intention to relocate from Ireland.
The Milliman report points to the reasons why this may be the case:
- Increasing pressure on the EU cross-border business model, which was one of the key drivers for business coming to Ireland in the 1990s and 2000s..
- Few new entrants from outside the EU.
In their survey conducted for the report, Milliman asked international insurers to identify the main factors that led them to establish in Ireland.Four factors ranked as highly important – EU membership/market access, fiscal regime, availability of skilled labour, and regulatory regime.However, there is a general perception that Ireland’s attractiveness as a location for international insurance has changed over time.Milliman asked the same international insurers to rate how well Ireland now scores for each of the factors. While EU membership / market access and fiscal regime still score relatively well, the other two now score poorly i.e. availability of skilled labour and regulatory regime.
Overall, therefore, the Milliman survey results suggest that, based on the opinion of those international firms that chose to locate here, Ireland is a less attractive location than it was when they first arrived, with regulation and a tight labour market being the two principal factors that have led to that reappraisal.
In addition, when it comes to the cost of doing business – although not rated as one of the key criteria for choosing Ireland in the first place – Ireland scores very poorly among survey respondents.
Speaking about the report, Moyagh Murdock, Chief Executive, Insurance Ireland, said “The Milliman report clearly points to a need to address some key aspects of Ireland’s overall offering as a location for international insurers, the most challenging of these being the regulatory burden, availability of talent, and the overall cost of doing business.Ireland had previously been highly successful in attracting international insurers to the market, bringing significant jobs and investment to the country.If we are to build on this and avoid slipping backwards, we urgently need to address these issues.”
Michael Culligan, Principal and Consulting Actuary, Milliman, said “We are pleased to have produced this timely report for Insurance Ireland. Our research shows an industry that makes a significant economic contribution – both directly in terms of employment and contribution to the Exchequer, and indirectly through the role it plays in facilitating commercial activity. However, the risks and concerns identified by our survey respondents point to a need to address aspects of Ireland’s competitiveness in terms of continuing to attract and retain international insurers and reinsurers.”