Today, Ireland is one of the fastest-growing economies in the world, with a particularly robust finance industry. Home to over 400 global financial institutions, Ireland is the fourth largest provider of financial services in the EU. It is the global centre for IFS (Internationally-traded Financial Services), directly employing over 40,000 people, and was voted as one of the top ten innovative countries in the world in 2017. Its strength lies primarily in the high amount of foreign investment there, its unchanged position within the European Union and Eurozone, its large population of highly-skilled workers, and its investment in a number of initiatives and programmes to drive innovation.
With the recent boom of fintech and in the wake of Brexit, what does the future landscape look like for Ireland’s insurance, finance, and life and pensions sectors?
2018 was a strong year for insurers, bolstered by steady economic growth, higher interest rates, and higher investment income. However, as technology drives innovation, the insurance industry needs to be agile and willing to evolve its approach in order to stay ahead of the curve. Insurers need to take advantage of new technologies, such as process automation and AI, in order to offer new solutions and remain competitive in the market. KPMG International’s Global CEO Outlook found that 73% of insurance company CEOs said they were open to undertaking radical transformation, suggesting that industry change is already underway.
The insurance industry in Ireland has grown substantially in recent years, with a number of global insurance companies establishing headquarters here. With more than 230 businesses operating here and 28,000 people employed, the industry generates an impressive €32 billion premium income from domestic and international customers. The growing international interest in Ireland in particular suggests a positive outlook for the industry.
The rise of FinTech also spells good news for Ireland. The convergence of technology and financial services – both of which are traditionally Ireland’s strengths – sets the country up to excel by being at the forefront of future development. Technology-forward financial services companies such as Deutsche Bank, MasterCard and Citi, to name a few, already have a strong presence in Ireland, as well as nine of the world’s top 10 global software companies. The competitive 12.5% corporate tax rate encourages innovation and a number of Irish FinTech start-ups have already made their mark on the sector. FinTech is an incredibly exciting sector and Ireland is very well-positioned to ride the wave.
Similarly to insurance, the life and pension industry in Ireland is reasonably strong, generating over £150bn of annual premium income. M&A activity is forecasted to continue, with companies looking to grow either through acquisitions or through increasing new business volumes. However, these companies also need to undergo a digital transformation in order to remain competitive in today’s market. James Tufts, UK Head of Life & Pensions at EY stated, “The industry is set for a challenging year […] trying to engage customers, please shareholders and satisfy the Regulator.”
With the future of financial services looking like it will play to Ireland’s strengths, the coming years are sure to be an exciting time for the industry here, as long as we can harness its full potential.
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