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Insurance
New International Financial Reporting Standards (IFRS), new regulations, new technology, the recent pandemic and growing expectations for the insurance industry to play a greater role in environmental, social and governance (ESG) issues, have presented challenges and opportunities for insurers. In this increasingly complex business and uncertain geopolitical landscape, companies which are agile, innovative and able to drive change at scale, will gain a significant competitive edge.
The effects of the recent pandemic and the geopolitical unrest have been felt in the Cyprus economy and the insurance sector. Although premiums have been stable over the last few years, insurers may have to consider premium increases, given recent inflation. In line with the global trend, sustainability issues are also increasingly becoming part of the insurance strategy and compliance agenda of each insurer.
Keeping up and Staying compliant
Solvency II Amendments
Solvency II amendments are coming into effect from January 2027, aiming to enhance the resilience of the insurance sector, improve risk management, and reduce regulatory burdens for smaller entities.
These amendments promote long-term investment, enhance supervisory practices, and reduce unnecessary burdens on smaller insurers.
For more information read the full article below.
Insurance Recovery and Resolution Directive
The Insurance Recovery and Resolution Directive establishes a new EU framework for managing insurer distress and supporting orderly recovery and resolution. From 30 January 2027, selected insurers will be expected to maintain pre-emptive recovery plans that protect policyholders, support financial stability and reduce reliance on public funds.
Insurers should begin by assessing their likely scope, reviewing governance and data capabilities, defining recovery indicators and options, and testing how their plans would work under severe stress.
PwC supports insurers throughout this process-from scope and gap assessments to plan development, stress testing, data improvement, training and implementation.
For more information, read the full article below.
Risk & Opportunity
The insurance industry’s core strength is assessing and determining how to manage Life, Health and Non-Life risks. Sustainability risks are no different.
In certain areas, notably climate, the insurance industry can play a leading role helping other industries understand and act.
Moreover, because of their vital economic role as underwriters and investors, insurers have the ability to significantly influence climate impacting businesses and development initiatives.
The growing threat of climate change poses systemic physical and transition risks, with direct implications for the insurance industry.
To protect against and prevent these risks, insurers will need to develop a deeper understanding of them in their portfolios, rebuild their risk models and pricing assumptions, create new climate-related products and services, work with organisations to help them mitigate climate risks and embed the IFRS 17 accounting and reporting standards to reflect the real economic value of the risk carrier.
New and Better ways of doing insurance
The rise of the sharing economy and the ability to improve operations using advanced analytics and artificial intelligence are some of the recent developments pointing to disruptive innovation. Rather than defend against, insurers will need to take advantage of such innovation.
Insurers who are currently focused on catching up with their competitors around customer centricity and other current trends are missing the opportunity to become technologically proactive.
With a growing need to find long-term solutions to address business resilience, insurers must go beyond their traditional mandate and engage in effective transformation.
How we can help you
By bringing together a tech-enabled community of solvers with deep insurance sector experience and expertise, we can assist you face the new challenges and manage the risks of doing business in a highly volatile and uncertain economic environment. And with substantial depth and breadth of skills and competencies, our insurance sector team plays an important role in helping our clients build trust and deliver sustained outcomes.
We work with insurance businesses by providing the whole spectrum of actuarial, regulatory, audit, advisory and tax services.
When you team up with PwC you are teaming up with people who understand the big challenges facing your industry, bringing local perspectives coupled with the international expertise only an organisation of our breadth & experience can deliver.
We believe insurers have an opportunity to shape an optimistic future for the industry – one that pushes boundaries to build upon its purpose and become a force for greater good.
Together, we can create sustainable change in insurance!
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Director, Advisory, In charge of Actuarial Services, PwC Cyprus
Tel: +357 - 22555141