The Minister of State with responsibility for insurance has said it is important that the industry passes on all the savings and benefits made from reform of the sector to the public through reduced premiums and increased risk appetite.
Sean Fleming said the reforms had been sought by the industry itself and so far they have yielded a 10% reduction in motor premiums over the past year.
He was speaking as new research found increasing cost pressure is the biggest challenge facing the Irish insurance sector at present, according to those at the top of it.
61% of insurance leaders said it was the greatest issue for their business, up from 19% last year.
The PwC-Insurance Ireland Leaders Report also shows that nearly half of insurance bosses are now worried about the retention of talent, which was the number one concern in 2019.
While the cost of insurance claims was cited by 36% of insurance leaders as their biggest difficult.
Nevertheless, 83% were confident about their business' growth over the coming year.
"Despite economic uncertainties, Irish insurers are confident about growth prospects in the year ahead," said John O’Leary, leader of PwC Ireland’s insurance practice.
"The survey points to a resilient insurance industry which has come through the tests of Covid-19 remarkably well while investing in priority areas."
"However, cost pressures and the availability and retention of key talent have increased dramatically."
40 Irish insurance leaders spanning the sector took part in the study.
43% indicated that over the next three years environmental, social and governance (ESG) initiatives would be a priority area for significant investment, while 38% said they would focus funding on digital transformation.
28% said that cybersecurity and data privacy are their organisation’s priority and 23% claimed leadership and talent development would receive investment.
When it comes to action the Government can take, the study found 86% of respondents see the single key priority to be ensuring Ireland remains competitive in the face of rising costs, up from 51% last year.
Availability of key skills and continuing to address the cost of claims were also seen as important.
"It's encouraging to see general business confidence and optimism reflected among the leaders in the insurance sector in Ireland, but the emphasis now needs to be on remaining competitive as an industry in the face of global headwinds," said Moyagh Murdock, chief executive of Insurance Ireland.
"Insurance leaders are aware that they must do everything they can to bring innovation to their businesses and leverage technology to gain efficiencies in a consumer-driven world."
Nearly half of Irish insurance leaders currently said their business has a plan to manage climate risks in relation to their insurance portfolio and investment strategy, up from 28% two years ago.
Six out of ten said that they have made a carbon-neutral or net zero commitment.
Sean Fleming welcomed the positive results from the survey but urged insurance companies to pass on the benefits of reform.
The insurance sector has faced criticism for not reducing premiums more following the implementation of major changes, such as the introduction of revised personal injury guidelines and moves towards banning so-called "price-walking".
"The Government’s Action Plan has produced positive results," he said.
"Over the past year there has been a 10% reduction in motor premiums."
"These reforms were sought by the insurance industry and it’s important that the sector pass on all savings and benefits back to the public, in terms of reduced premiums and increased risk appetite."
