KPMG has released their insurance report, Insurance Insights December 2024, which is a collection of articles and publications outlining topics currently most relevant to the insurance industry.

At Compare Insurance our mission is to provide you with the information that you need to make informed decisions about your personal and business insurance. We aim to keep you up to date with developments in the Irish insurance market that are relevant to you.

Here we have summarised the key points of the report, which highlights a number of potential developments in the sector, as well as news and updates on regulatory changes that are upcoming.

1.Insurance and aviation’s decarbonisation

Insurers can support the aviation industry’s decarbonisation efforts by focussing on contrails and supporting airlines in their reduction. 

Contrails are the vapour trails left in the air by aircraft. These can be minimised by “tweaking” the flight paths of aircraft reducing contrail warming at minimal cost and insurance has a role in supporting such measures.

2. Harnessing AI

KPMG discusses how AI can enhance insurance and financial services in a number of ways such as:

  • Automating claims
  • Assessing risks
  • Personalising products and services
  • Combating cybercrime.

This report encourages broader adoption of AI in order to fully realise its benefits and for growth and strategic objectives.

3. Future of risk

As businesses face increasing challenges in terms of reputational, environmental, regulatory, and societal challenges, traditional models of risk management are no longer sufficient.

This report highlights how risk management models must change to view risk as an asset and an enabler that can drive stakeholder value.

4. Insights from internal audit 2025

KPMG identifies key thematic areas and related risks that must be considered in developing 2025 audit plans. The areas include:

  • External pressures
  • Operational challenges
  • Technology
  • Regulatory – driven risks.

Internal audit functions must remain flexible and responsive to meet the challenges of a volatile and dynamic risk environment.

5. Global AI in finance report

This report by KPMG looks at the adoption of AI by organisations in Ireland across their finance functions. The benefits of AI include:

  • Better data-driven decisions
  • Lower costs
  • Improved trend detection

It states that over 50% of organisations now use AI and nearly half of the companies report that the return on AI investment meets or exceeds expectations.

6. 2024 Technology and telecommunications CEO outlook

This report presents an overview of the objectives, challenges, and strategies facing technology and telecommunications CEOs.

The Industry has benefitted from global economic growth, and CEOs are cautiously optimistic while being realistic about the challenges faced by the technology and telecommunications industry’

7. Central Bank updates

The December 2024 edition of Insurance Insights from the Central Bank focusses on the supervision of the (Re) insurance sector, especially with regard to:

  • Pricing and underwriting discipline, reserving and capital adequacy.
  • Adherence to the Individual Accountability Framework and the Consumer Protection Code.
  • Adequacy of product oversight and governance frameworks.
  • Operational resilience and DORA implementation.

8. European Insurance and Occupational Pensions Authority updates

Financial entities and ICT third party service providers are called to prepare so that they are ready to comply with the Regulation on digital operational resilience for the financial sector (DORA).

The European Insurance and Occupational Pensions Authority (EIOPA) has also published a second batch of consultation papers on technical standards.

9. UK updates

This section of the KPMG report includes various updates on publications from the Financial 

Conduct Authority (FCA), and from the Prudential Regulation Authority (PRA). 

These publications largely relate to regulatory changes and reviews in the UK.

10. Other European and International supervisory authority updates

The International Association of Insurance Supervisors (IAIS) has announced the adoption of the first comprehensive global capital standard for insurance supervision, the Insurance Capital Standard (ICS) and the publication of their global insurance market report (GIMAR) for 2024.

The Official Journal of the European Union (OJEU) has published the European Commission (EC) Implementing Regulation with regard to the register of information under DORA.

The IAIS has also published a note jointly with the Financial Stability Institute (FSI) on using parametric insurance coverage for natural catastrophe risks with a focus on ono-agricultural applications for households and SMEs.

The report suggests improving the adoption of parametric insurance by:

  • Use of AI/ machine learning for data.
  • Implementation of risk based pricing.
  • Improving consumers’ financial literacy and understanding of risk.
  • Reducing regulatory uncertainty.
  • Fostering co-operation with stakeholders.

What does all this mean for me?

The purpose of the KPMG insurance insights December 2024 report is to provide a comprehensive overview of the latest trends, challenges, and opportunities in the insurance industry.

The report touches on topics such as:

  • Climate change
  • The advent of AI and developments in data generation in the insurance and financial services sectors.
  • Future developments in the insurance industry.
  • Supervisory and regulatory changes upcoming.
  • Increased challenges and uncertainty facing the insurance industry.

These topics can have a real impact on insurance consumers such as obtaining insurance coverage in times of climate uncertainty, pricing and risk and claims assessment for your home or business insurance, and the possibility that the burden of increased regulation may be reflected in higher costs for consumers. 

However, there are also developments that may point to benefits for insurance consumers such as personalisation and more flexible risk assessment leading to better insurance cover for your personal or business insurance needs and regulation of how insurance and third party companies store your data.

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