Irish insurance bosses fear they’ll struggle to be compliant with tough new data rules in May, potentially leaving their businesses liable for multi-million euro fines.
The General Data Protection Regulation (GDPR) is tipped as a key challenge, in a survey of insurance sector CEOs, along with Brexit, cyberattacks and skills shortages.
The stakes are massively high. Insurers hold highly-sensitive personal data about their customers – including claims and health details.
Under the GDPR regime, from next month a failure to correctly manage that data will attract punitive fines.
The GDPR gives regulators, including Ireland’s Data Protection Commissioner, powers to hit firms with up to a maximum of 4pc of a company’s global annual turnover, or €20m, whichever is higher.
Even existing data protection rules have long been regarded as an impediment to the sector, for instance by blocking the sharing of detailed claims and customer data the sector argues could be used to help identify fraudsters.
PwC’s 21st Global CEO Survey of 100 insurance chief executives suggest the sector has a generally positive outlook when it comes to the overall global economy.
Half of insurance CEOs believe that global economic growth will improve over the next 12 months, up from only 19pc in 2017.
Nine out of 10 insurance CEOs are confident about their own organisation’s revenue prospects over the next three years.
There are significant clouds on the horizon, however.
In Ireland, the majority (63pc) of Irish insurance CEOs see Brexit as a disruptor, although some see opportunities for their UK operations to relocate to Ireland.
Central Bank of Ireland deputy governor Ed Sibley warned earlier this month that the insurance sector here was significantly underprepared for the potential impact of Brexit.
The pace of technological change is also flagged as a concern by insurance bosses.
In Ireland, GDPR is a key challenge, with many struggling to be compliant for the May deadline.
Globally, insurance CEOs biggest concerns are what they describe as “over-regulation” (95pc), cyberthreats (93pc) and speed of technological change (85pc).
With data protection, cybersecurity and new technologies all highlighted as challenges, it’s little surprise that eight out of 10 insurance CEOs are concerned about shortages of digital skills within the industry and within their own workforce. That is the highest percentage of any industry surveyed by PwC.
Notably, the levels of “extreme concern” regarding cyberattacks has almost doubled since the last survey.
Technology should offer significant opportunities, as well as threats to insurers according to Darren O’Neill, Data Analytics Partner at PwC Ireland.
“There are substantial opportunities on the horizon as a new generation of predictive analytics and AI transforms insurers’ ability to detect, anticipate and avert risk,” he said.
“Notable possibilities include RegTech, which can not only strip out costs in labour-intensive areas, but also strengthen risk management and improve compliance. In fact, Irish insurance CEOs see greater opportunities from data analytics, AI and robotics compared to global counterparts.”