Insurance sector ‘can create 3,000 more jobs’

The insurance industry in Ireland has the potential to create 3,000 jobs over the next five years and invest up to €1bn in infrastructure projects, according to a major review.

The report, ‘Creating the Future for Insurance in Ireland,’ which was compiled by PwC and commissioned by the representative group, Insurance Ireland, outlined three areas that the Government and industry should focus on to develop the sector.

These included promoting Ireland as a location for international insurance companies.

The report recommends that a high-level group of senior insurance and government representatives “should be established with a strong mandate to develop Ireland’s reputation internationally, encouraging overseas companies to locate here and build on existing investments”.

Ireland has a number of advantages relative to competing jurisdictions, including “the quality of our people, the business-friendly environment, a low and stable onshore tax regime and an improved competitive cost base”.

However, PwC’s Tony O’Riordan said the Government should put in place incentives for foreign executives to locate in Ireland.

The level of income tax is much higher than other markets, he said. With the appropriate policy changes this approach had the potential to create 750 jobs in the next three to five years.

The report also recommended a new charter for consumers that would focus on “urgent reform of the pensions and private health insurance regimes, seeking to facilitate improved private provision in both cases, with clear benefits to the state and the consumer”, it read.

This would include ways of enticing people to take up pensions and healthcare insurance at earlier stages in the working lives and also make coverage much more widespread. If a new charter for consumers was introduced, then that had the potential to create 500 jobs, said PwC.

The insurance sector also holds huge amounts of cash. With the proper clarity on how much capital it would need to keep in reserve for infrastructure investments and also what the rate of return would be in these types of projects, the insurance industry could potentially invest up to €1bn in Irish infrastructure, said the report.

The insurance sector already employs 27,000 people and has roughly €200bn of assets under management. Last year, it paid €1.6bn in tax to the exchequer and paid out €5.4bn in claims.

A collaboration with the information technology sector to make Ireland an innovation hub for insurance has the potential to create another 1750 jobs, said the report.

“The report comes at the right time,” said Finance Minister Michael Noonan, “and fits in with the Government’s Medium-Term Economic Strategy for the period 2014-2020 launched last December where we set out our ambition of developing a more diversified, competitive and responsive financial infrastructure that can finance growth across the economy”.