Economic recovery, an aging population and regulatory reforms are expected to support the growth of Ireland’s life insurance market between 2013 and 2018, according a recent Timetric report available at the Insurance Intelligence Center (IIC).
The report, Life Insurance in Ireland, Key Trends and Opportunities to 2018, says the Irish life insurance market’s gross written premium increased from 26.3bn ($28.7bn) in 2009 to 31.2bn in 2013.
From 2013 to 2018, the IIC report says the Irish life insurance market’s gross written premium is forecast to rise from 31.2bn to 35.8bn respectively.
A European Commission (EC) report explains that from the early 2000s onward, Irish economic growth was fuelled by a property bubble marked by an overreliance on construction and the rapid expansion of credit.
When the bubble burst in 2007-08, all parts of the Irish economy were affected. For example, the rate of unemployment tripled in just one year.
However, the economic outlook for Ireland has improved markedly in recent times. Exceptionally strong net exports made Ireland the fastest growing economy in the EU in 2014
An EC report published in June 2015 said strong investment growth and the recovery in private consumption should underpin real GDP growth of about 3.5% in 2015 and 2016. This compares with real GDP growth of 0.2% in 2013.
Jennifer Hoban, life assurance manager at Insurance Ireland, which represents 95% of the domestic insurance market in Ireland, says the body is seeing is a recovery in premium income figures following the economic downturn.
She tells Life Insurance International: "Hopefully, that will continue. The trend is more positive now that it has been in the recent past.
"As the economic situation improves, we would expect to see a rise in premiums in for example, mortgage protection and critical illness. "
In addition to the Irish domestic market, Hoban says Ireland has also developed a very successful international life assurance market.
Barry McCutcheon, protection marketing manager at Aviva Ireland, says term assurance and serious illness cover will continue to be key product trends over the next 2-3 years.
He says: "Specifically, we feel that convertible term cover will be the key driver of business in the protection sector in the next few years."
In terms of the main challenges, facing Ireland’s life and protection insurance industry over the next 2-3 years, McCutcheon says one challenge is a potential ‘race to the bottom’ on pricing.
He says: "We see this more and more – pricing is of utmost importance for financial advisers, and after that they start to consider product features.
"It is a continual challenge to educate the public of the importance of insurance in general and specifically the peace of mind which life insurance products provide."
McCutcheon says another mindset that needs to change is the myth that insurers always seek to decline claims. "Aviva’s declines on term cover were just 1% last year," he comments.
He adds: "Another challenge is that the medical industry is moving to genetic based information gathering – currently the life assurance industry is not permitted to gather genetic history and we are in danger of falling behind if this continues."