With ‘Brexit Day’ approaching the only certainty is this: March 29th 2019 will be here soon. What it looks like, and what type of Brexit the UK opts for, no one really knows. But among all the uncertainty, the time could be right for the Irish insurance industry to thrive and grow.
Last year the Irish Independent reported that 150 financial service businesses made licence applications to the Central Bank. When you consider the number of applications, along with the list of businesses leaving London, you get an indication of what the future may hold. Just this morning the Irish Examiner reported Aviva to move €10.1bn in assets to Dublin as Brexit looms, further evidence that the growing apprehension surrounding Brexit means Insurance companies are actively considering their own “Irish backstop”.
For the insurance industry in Ireland the opportunities could be massive. The UK insurance sector is worth £1.8 trillion of inward investment. The appeal of opening subsidiaries in an EEA jurisdiction, with low corporate tax rates, offers an appealing real estate.
With 50% of the world’s leading financial service firms having a subsidiary in Dublin, and as the only other English-speaking location within the EU, the opportunities are there for the taking. But we’ve already seen that not all firms are relocating, meaning nothing is certain.
So, what could Brexit bring to Ireland?
- RETAINED TALENT
It’s no secret that we have skills shortages in key areas across Ireland. Many of our best and brightest have previously been attracted to the bright lights and big cities of the UK.
There’s a huge potential to keep these career-hungry individuals from travelling across the water. With regards to the insurance industry, we are in a prime position to retain these staff within the sector, building the next generation of future leaders.
- RECRUITMENT OPPORTUNITIES
For existing insurance companies, the potential relocation of businesses based in London brings with it the opportunity to recruit fresh talent. Individuals who may relocate will bring new skills and expertise with them.
It may be a trickle-down effect for the market, and take a couple years for natural staff turnover to occur, but if this happens businesses could find themselves with a huge pool of talented individuals looking for their next role in the industry.
- OUTSOURCED SOLUTIONS
With no real idea what will happen, creative solutions may be needed. If permissible, and it’s a BIG if, there could be the option for firms operating in Dublin to provide an outsourced option to insurance businesses in London while Brexit moves forward.
This could result in new staff relocating from London on a temporary basis. Subsequently, this could lead to long-term opportunities if outsourcing is a mainstay or temporary staff enjoy the culture and decide to emigrate to Ireland.
- CENTRAL BANK OF IRELAND REGULATION
Around some of the opportunities – particularly outsourcing – will be the role of the Central Bank of Ireland. We have already seen issues surrounding license application backlogs and the subsequent effects of the delays.
As the CBI focuses on ‘securing financial stability’, there is a possibility it could maneuver to de-risk the impact of Brexit on Ireland. Businesses seeking to use Ireland’s position in the EEA, and the associated passporting rights, could struggle against the potential introduction of new regulations designed to protect the financial services.
- STAFF RETENTION CHALLENGES
The reality is that companies setting up subsidiaries in Ireland also pose significant risk to insurance firms already here. Higher tax rates, cost of living, difference in healthcare systems, transport links and VRT, could dissuade people moving here.
The problem with that? Companies opening shop in Ireland would need to recruit from the pool of talent already here. This means organisations could see their top staff poached to fill the necessary roles to start new business operations.
- SWITZERLAND OR NORWEGIAN MODELS
Depending on the outcome, insurance firms operating in London may need to adapt. A very real possibility is the adoption of frameworks that mimic those of Switzerland or Norway, who have access to the EU market without complying with all EU laws.
If this happens then businesses should again consider the implication of staff being attracted to the UK. If the roles are still available, and attracting our top talent, we may see negative effects on staff turnover rates in the industry.
QUESTIONS FOR THE INSURANCE INDUSTRY
There are two ways to look at the role Brexit could play in the relocation of insurance firms to Ireland: risk and reward.
The risk lies in losing your key personnel to new opportunities, career advancements and change of working environments. The reward is in the opportunity to recruit new and senior professionals, with diverse skill sets, who can contribute to your company’s strategic growth.
With the potential for Brexit to be an amalgamation of different agreements, staff involved in recruitment should focus on having solid strategies that answer the following three questions:
- How do they retain their best people?
- How do they present an attractive offer against competing options?
- How do they hire for the future?
Will Brexit be a golden opportunity for the insurance industry in Ireland? Well, like Brexit itself, the future is unknown. And within 24 hours of publishing, this could all be history and irrelevant.
Whatever happens the insurance industry needs to adapt for all possible outcomes and have a strategic action plan, that they can implement, should formal announcements dictate market plans.
Those who are prepared will ultimately stabilise their business and capitalise on the outcome – whatever that may be. Those who sit and continue to ‘wait and see’ may find themselves at the bottom of the pecking order, struggling to keep up.
About Campbell Rochford
Campbell Rochford is a specialist executive and contingency search company with over 18 years’ experience of the Insurance sector. We’re passionate about sourcing and placing the most difficult to fill roles in the market and our mantra is “Turning Good To Great”, meaning we turn good clients into great ones.
We provide a bespoke professional recruitment service that delivers quality results and we have an extensive network of clients and candidates throughout Ireland, UK, Europe, US, & Asia.
Our brand represents a fair, transparent and ethical recruitment service that has been developed through many years of successful recruitment assignments both in Ireland and overseas.
Are you worried about losing out on the best talent to other firms? Working with Campbell-Rochford means you’re never second-best. We help insurance industry firms recruit talent that makes a real impact to their business.