Originally covered in the Malta Independent.
A breakfast briefing held this month has underlined some major upcoming changes in key insurance markets that will have an impact on Maltese individuals and companies. These include the rising competition for local talent and the impact of autonomous vehicles.
The event, hosted by Boston Link and international actuarial consultants ACTi Consulting, was attended by a range of local insurance experts. It featured several short sessions on different challenges the Maltese insurance industry is facing, or can expect to face in the next few years.
Julian Perigo, Managing Director of Boston Link, focused on the employment challenges facing insurers in Malta: “In the context of rising wages, industry growth, and increased competition from other sectors, talent acquisition and retention are two of the biggest challenges facing the industry. We’ve seen a massive 72% growth in insurance-driven activity in financial services recruitment year on year. We expect that to continue, so firms will need to take radical steps to stay ahead of the competition.”
In response to these challenges, Julian stressed the importance of investing in training and development, flexible and remote working opportunities, and creative benefit schemes such as health insurance, pensions, and gym subsidies. He also encouraged employers to start considering relocations, taking advantage of Malta’s domestic tax regime to attract new workers from overseas to fill skilled positions that can’t be filled locally. While the gaming sector sometimes gets criticised for distorting wages in Malta, there is a lot that can be learnt from the way that they attract and retain talent.
For Adam Brunskill, Managing Director of ACTi Consulting, one of the biggest challenges that will impact the motor insurance market will be the introduction of autonomous vehicles. He commented: “As 94% of road traffic incidents worldwide are caused by human error, even imperfect autonomous-driving technology has the potential to drastically improve collision statistics and therefore make insurance more affordable. There are, however, still plenty of concerns that may give insurers pause. In addition to the sort of things that currently affect your premiums, in an automated world insurers will also need to add in data on GPS coverage in your area, cybersecurity and hacking risks, and potentially even what software version you run in your car.”
In addition, Adam underlined the importance of so-called ‘smart underwriting’, as firms increasingly use more complex behavioural modelling and ‘data enrichment’ to improve their actuarial analysis. There was also discussion and illustrative financial impact of the recent changes to the Ogden rates in the UK, which are expected to have significant consequences – that may potentially include substantially increased premiums in some markets and may result in insurers pulling out of the market.
Guest speaker Nigel Goodlad, Regional Managing Director for Willis Towers Watson Global Captive Practice, Europe, rounded out the day’s content with an update on the international captive insurance market, which has been a major driver of growth in the Maltese sector. He explained that interest in Malta as an EU domicile of choice remains high and that the jursidiction’s responses to Solvency II and Brexit have helped to ensure that position in the global market.