The number of insurance and reinsurance businesses based in Ireland has fallen 39% since 2009, a new study has found.
Life companies have dropped by 42% over the period and non-life firms by 29%, while the volume of re-insurers has decreased by 47%.
On top of that the largest international non-life companies and one of the largest international life businesses have announced they plan leave the country, the report by consulting firm Milliman for Insurance Ireland pointed out.
The authors said there are a number of reasons why, apart from some new arrivals due to Brexit, the sector in general has shrunk by numbers in recent times.
These include growing pressure on European Union cross-border business models, which was one of the main reasons behind some of the companies coming to this country in the 1990s and 2000s.
While in the interim there have been few new entrants into the market originating outside of the EU, the research stated.
The analysis found that the general perception of the country’s attractiveness as a location for insurers to operate from has altered.
Respondents to the Milliman survey said EU membership and market access, as well as the fiscal regime, the availability of skilled talent and the regulatory regime were all highly important factors behind their decisions to come to Ireland in the first place.
But the same businesses said that while EU membership and market access, and the fiscal regime still rate well, the availability of skilled labour and the regulatory regime in Ireland now score poorly.
Ireland also scores very poorly when it comes to the cost of doing business, the research found.
“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,” said Moyagh Murdock, Chief Executive of Insurance Ireland.
“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.”
Despite the concerns about Ireland’s future attractiveness, the report also found that the sector employs some 35,000 people and contributes in excess of €2.7 billion a year to the exchequer’s coffers.
Ireland is now the fourth biggest hub for insurance in the EU and among the most important centres anywhere in the world.
Last year, 187 insurers and reinsurers located here paid over €68 billion in claims and held around €300 billion in life and pension assets.
Although the volume of firms has fallen in recent years, the sector by value has grown considerably from €73 billion in gross written premium six years ago to over €100 billion last year.
“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,” said Michael Culligan, Principal and Consulting Actuary, Milliman.
“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.”
The results of the research will be launched at the Insurance Ireland organised European Insurance Forum in Dublin today.