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Cyber risk, tax top threats for CEOs – PwC

By BusinessNews Staff on August 5, 2015

The findings of two recent reports by PwC that chart the top risks in the global insurance sector and the growth concerns of insurance chief executive officer shows that cyber risk, interest rates and growing tax burden are now among the top risks for insurers, two new reports by PwC have shown.

The findings of the reports, which examine the global insurance sector, are indicative of how high a concern these issues have become for the industry when looked at in conjunction with regulatory developments and the broader macro-economy.

One of the reports, Insurance Banana Skins 2015, a global study conducted by the Centre for the Study of Financial Innovation in conjunction with PwC, polled over 800 insurance practitioners and industry observers in 54 countries, including Nigeria.

The study sought to find out where the practitioners saw the greatest risks over the next two to three years.

Regulatory risk emerged as the overall top risk for participants in the survey for the third successive time, underlining the deep impact regulatory change is having.

The report stated that that new rules governing solvency and market conduct could swamp the industry with costs and compliance problems.

It could also distract management from the task of running healthy businesses at a time when the industry faces radical structural change.

Similarly, the second report, ‘Insurance 2020: Equipping your business for the global tax revolution,’ noted that the reputation and well-being of companies, including insurance groups, was not just being impacted by governments, taxpayers and other stakeholders but also by external perceptions of how they manage their tax affairs.

Commenting on the reports, PwC Nigeria Financial Services Leader, Patrick Obianwa, said, “The insurance industry faces enormous challenges in the growth of regulation, a difficult operating environment, increased taxation and the looming threat of structural change.”

He added, “This is reflected in the negative sentiment behind these survey results. Given the current speed of regulatory, technological and social change, the challenge for the insurance industry globally is less about what is already happening, and more about how to anticipate what further changes could happen between now and 2020. Very few tax teams appear to have evaluated the likely future alternative scenarios, let alone made plans or put them into implementation.”

[Punch]

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