linkedin

tel090 6627878

mail info@oates.ie

Cybersecurity top concern for Irish insurers, according to CSFI / PwC report

Cybersecurity top concern for Irish insurers, according to CSFI / PwC report

« Back to all News

 
 

Cyber risks, macro-economic challenges and change management are the top risks for Irish insurers, and Brexit is causing great uncertainty for the sector in Ireland. These are the findings of the latest Insurance Banana Skins 2017 survey, conducted by Centre for the Study of Financial Innovation (CSFI) and PwC.

The survey canvassed 836 insurance practitioners and industry observers in 52 countries, including Ireland, to find out what they saw as the greatest risks over the coming years.

Globally, the climate for insurers is becoming more challenging, according to respondents. The 2017 Banana Skins Index, which measures the level of anxiety in the industry, is at a record high, while perception of the industry’s preparedness to handle these risks has fallen from 2015.

The danger of cyberattacks in insurance

Speaking at the launch of the survey, PwC Ireland Insurance partner Paraic Joyce said: “Cyber risk is top of the list in Ireland for two years in a row, while macro-economic challenges and change management risks have shot into the top five. At the same time, it is concerning that the survey suggests that Irish insurers are less prepared to handle the risks compared to two years ago.”

Cyber risk is likely to remain high on the agenda given the recent WannaCry ransomware attacks.  Some Irish respondents noted that they were being attacked on a daily basis, with increasing levels of sophistication to the attacks.

PwC Ireland Cyber Leader Pat Moran said: “We expect more cyberattacks and, as insurers hold so much data, this is of particular concern. In today’s risk landscape, a company’s degree of readiness to handle a cyber crisis can be a marker of competitive advantage and ultimately ensure its survival.”

Economic and change management concerns

Concerns around the macro-economy have risen to second place from eight place last year, highlighting concerns about economic stability. Irish respondents also raised concerns about any new policies the new US Administration may introduce.  

Meanwhile, change management is the third greatest concern in Ireland, having shot up from 15th place in 2015. The report raises concerns about the industry’s ability to keep pace with change the formidable agenda of digitisation, new competition, consolidation and cost reduction. Change is a particularly acute risk, as rapidly emerging technologies such as driverless cars, the ‘internet of things’ and artificial intelligence could transform insurance markets.

Technology and insurance

Concerns around technology ranks fourth. Irish respondents are focused on the threats and opportunities presented by technological advances, with some describing the sector as “a slow moving industry with more losers than winners, needing to adapt and become more agile”. There are also concerns about the adequacy of insurers’ internal technology systems and new competition, particularly from the ‘InsurTech’ sector.

Paraic Joyce said: “With data analytic and digital tools becoming mainstream there is a huge opportunity for insurers to better understand their consumers and target them more effectively. Insurers will lose market share and some will become irrelevant if they don’t move with the trends. For example, it is highly likely that insurance will be sold through social media channels in a few years’ time.”

Brexit

Brexit scored seventh in Ireland out of the 22 concerns listed. There is no doubt that Brexit is causing great uncertainty for Irish businesses including the insurance sector.

Paraic Joyce said: “Brexit will bring opportunities for the insurance sector and it is incumbent on us all to ensure that Ireland has the capacity for new insurers to locate here and to ensure that this is properly communicated. PwC expects a hard Brexit and advises businesses to plan thoroughly for what that means for every aspect of their business.”

“Depending on the negotiations results, Ireland could have a competitive edge over the UK for financial services if EU passporting benefits were not retained there. While it is early days, we have seen many UK insurers looking at Dublin as a location in recent months as part of their Brexit preparations.”

The report shows that industry’s ability to attract and retain human talent in Ireland has become more challenging. Digital skills are important and insurers will need to work hard to ensure that they have the skills fit for a digital age and retain these skills.

ENDS

 

Article taken from the website 

http://www.pwc.ie/media-centre/press-release/2017/cybersecurity-top-concern-for-irish-insurers-csfi-pwc-report.html