Insurance as an area of specialisation for the Maltese accountant : an analysis

Abstract

Purpose: This study explores insurance as a sector-specialisation within the Accountancy Profession in Malta and the multiple factors which contribute to such a speciality. Design: The objectives of the study were attained by means of semi-structured interviews with seven local insurance companies and eight ancillary parties (Big Four; insurance managers; MFSA; MIA), accompanied by a content review on selected syllabi offered by providers of accounting education. Findings: Results indicated that there is the need for such a specialisation here in Malta as it is somewhat natural and inherent, and arises automatically when working within insurance. Solid integration between both accounting and sector-specific knowledge is required. Concerns on the lack of adequate labour resources were nonetheless raised, with fairly few accountants having background knowledge on insurance. Findings revealed insurance practice to be a core component for such specialism, with both accounting and insurance regulation identified as key drivers behind the specialist area. Compliance skills and actuarial understanding are essential, with Solvency II proposing greater relations between compliance, accounting and actuarial science - heavy reliance is placed on actuaries when accounting for insurance. Little to no exposure on insurance exists within the accountancy qualifications reviewed, and more academic structuring and awareness is suggested to sustain the accounting expertise required. Conclusion: This study concludes insurance to be an industry specialisation which calls for specialist knowledge to be maintained. The role and expertise which accountants hold in insurance entities are essential in ensuring that insurance remains a vital component to the financial services industry in Malta. Safeguarding the sector-specialisation through the preservation of high level of expertise, suitable education and training, and effective communication channels across the entity and its related parties and users, was thus denoted to be indispensable. Value: Such research is expected to add value to the accountancy profession and the insurance industry and help endorse the relationship between the two. This study sheds light on the importance of sector-specialisation within the accountancy profession in Malta together with the significant roles which accountants have come to hold in insurance and other industries, and identifies the portfolio of knowledge required to ensure that the necessary expertise in sector-specialisation is upheld.