On 30 September 2025, Director of Insurance at the Central Bank of Ireland (“Central Bank”), Seána Cunningham, delivered a speech (“Speech”) at the European Insurance Forum (“EIF”). The theme of the Speech centred around the future of insurance from the perspective of a regulator.

Ms Cunningham linked the theme of her speech to that of the EIF, namely, “Resilience and Revitalisation: Shaping the Future of Insurance”, noting that it is a timely juncture to reflect on such matters against a backdrop of rapid change and uncertainty, not only in the economy and the global financial system, but also in society.

The Director highlighted the Central Bank’s support for the recently published action plan for insurance reform, for more information, see FIG Top 5 at 5 dated 31 July 2025.

Role of Insurance

Ms Cunningham took the opportunity to consider the importance of a “well-functioning and resilient insurance sector” noting the important role insurance plays in supporting businesses and people when it comes to managing risks. She emphasised that one of  the key matters for the Central Bank is ensuring that the insurance sector functions in such a way so as to provide this support – reflecting the Central Bank’s mandate to ensure the operation of the financial system in a way that serves the best interests of consumers and the wider economy.

What Does the Future Look Like?

Here, the Director highlighted that there are emerging challenges and opportunities for the insurance sector, in the context of persistent geopolitical tensions and uncertainty, which “threaten economic growth and market stability.” She specifically highlighted challenges stemming from digitalisation, including AI, climate risks and aging population – citing the last two matters as having the potential to widen insurance protection gaps.

Against this background, the Director reiterated the commitment of the Central Bank to its four safeguarding outcomes and summarised the new supervisory approach of the Central Bank – operational since January this year, for more information, see FIG Top 5 at 5 dated 6 March 2025.

In this regard, the Director highlighted the fact that the insurance sector will be supervised in an integrated, holistic manner, further explaining that insurance firms having the potential to significantly impact safeguarding outcomes will be supervised at individual firm level. Ms Cunningham stated that “Under this new approach firms should hear one voice from the Central Bank, with more coordinated, consistent messaging and more streamlined demands across the full span of our regulatory and supervisory mandate.”

Simplification

The Director also touched on the topical theme of regulatory simplification, noting its role in an economy that is productive and competitive, while also highlighting the importance of regulation as regards the safe functioning of the financial system.

Ms Cunningham highlighted that the Central Bank is proactively engaging with the simplification agenda at a European and domestic level, citing the following examples:

• the streamlining of authorisation and change of business requirements by the Central Bank;
• the removal, by the Central Bank, of the requirement for an external audit of captive insurer's regulatory returns and public disclosures;
• the proportionality regime for small and non-complex undertakings under the Solvency II review; and
• EIOPA’s work on harmonisation and rationalisation of reporting requirements and guidance to firms and supervisory authorities.

Ms Cunningham reiterated the Central Bank’s position on simplification in that simpler standards cannot come at the expense of robust regulation, highlighting the balance that needs to be achieved.

Areas of Shared Focus – Resilience, Trust, Innovation

The Director highlighted three areas of focus as regards the Central Bank’s approach to the regulation and supervision of the insurance sector as follows:

• resilience in uncertain times;
• accountability, trust and consumer focus; and
• responsible and ethical innovation.

Some of the matters she highlighted when discussing these key areas were as follows:

• the insurance sector has demonstrated resilience over the past number of years but that does not leave any room for complacency – emphasising that rising geopolitical tensions and economic divisions present challenges for insurers, making  prudent risk management and resilience, both at firm level and on a wider scale, more important than ever, together with the maintenance of financial resources that enable the weathering of severe but plausible stresses;
• trust is fundamental as regards the insurance sector and its relationship with its consumers –consumers should be in a position whereby they trust that they are getting value for money, are provided with ongoing support and that should insured risks crystallise, losses will be covered.  In this regard, the Director highlighted that the Central Bank believes that “the development of consumer focused cultures, robust governance and well defined accountabilities are the fundamental building blocks of organisations that are trustworthy.”
• the development of consumer trust will see the insurance sector taking an active role in addressing emerging protection gaps;
• importantly, the Director noted that the Central Bank will continue to examine how firms are delivering as regards their responsibilities to their customers, through its supervision;
• regulators and industry must have regard to the opportunities and the risks posed by innovation, with the Director emphasising that insurers need to have an approach to innovation that is responsible and ethical. Looking to generative AI, Ms Cunningham highlighted that firms will be required to consider its ethical and responsible use, including having related governance and controls when it comes it oversight; and
• the Director also stated that the Central Bank will focus on developing a deeper understanding of the use of AI systems in the insurance sector, including assessment of appropriate governance and controls. 

On 30 September 2025, the Department of Finance (“Department”) announced a strategic partnership  with Lloyd’s under which Ireland will host a dedicated cohort of the Lloyd’s Lab Accelerator Programme (“Programme”) in the first half of  2026.

The Programme aims to help innovative ideas gain traction and achieve success in the insurance market, providing an opportunity to develop new technology solutions while being guided by experienced insurance professionals.

The Programme will operate over a ten week period. During this time start-ups, scale-ups as well as mature companies, will be provided with the opportunity to develop a new product for the Lloyd’s market. 

The Department has described this development as a landmark opportunity to showcase Ireland’s position as a hub for insurance and financial services.

The Programme also supports the objectives of the Ireland for Finance Strategy as regards enhancing Ireland’s competitiveness and innovation.

Theme

The Programme will feature a dedicated Irish theme, which will be one of the three strategic themes of the Programme. There will also be sub-themes focusing on flood risk, cyber, artificial intelligence and enabling the economy through supporting export finance. 

The Department explains that the Programme is designed to produce commercially viable solutions aimed at strengthening market resilience, unlocking new premium and supporting the evolution of insurance products in the Irish and global markets.

Next Steps

Applications to the Programme for Cohort 16 will be accepted from 10 December 2025. Further information can be found here.

Welcoming this development,  Robert Troy TD, Minister of State at the Department, stated:

“Hosting a Lloyd’s innovation programme is an exciting development for Ireland’s insurance sector. The Lloyds Lab Accelerator Programme is globally recognised for developing solutions to the risks of the future, and its presence in Ireland reinforces our commitment to continuous reform and to our financial services industry. The Government’s Action Plan for Insurance Reform 2025–2029 places innovation, transparency, and resilience at its core, ensuring Ireland remains competitive, open to new entrants, and trusted by international investors. This collaboration with Lloyd’s will further deliver on those priorities.”

On 30 September 2025, a report (“Report”) entitled “Resilience & Revitalisation: Shaping the Future of Insurance” was published by Insurance Ireland who commissioned the Report.

The Report examined the current status of the Irish insurance industry, while also having regard to the future in terms of opportunities and threats. The Report also sets out the contribution that is made to the Irish economy by Irish insurers and also takes account of the industry’s wider role in society. 

Overview of the Insurance Industry

The Report notes that the insurance industry in Ireland is larger, more diverse and makes a greater contribution to the economy than many other European peers, relative to the size of Ireland. The existence of a growing domestic industry is highlighted as well as the substantial international and reinsurance sectors – which the Report notes, provides the Irish insurance industry with a scale it would not otherwise have.

A reduction in the amount of insurance entities is observed but the Report states that this is counterbalanced by a continued growth in premiums and balance sheets.

Insurance Industry’s Economic and Social Contribution

The contribution of the industry to society is discussed, from retirement planning to protection from natural disasters. The Report highlights that such benefits are rarely acknowledged and that the insurance industry has a role to play in altering negative consumer perceptions by building trust, particularly those focused on cost increases and profits.

Under this section, the challenge in attracting talent is also addressed, with issues such as cost of living and the perception of the industry cited as contributing factors. 

The Report emphasises the value of embracing innovation and highlighting Insurtech initiatives as regards improving the perception of the industry among jobseekers.

Sector Outlook

Some of the matters highlighted under this section, following a survey of the CEOs of Insurance Ireland members, together with some non-member firms,  are as follows:

• 97% of respondents expect their businesses to be bigger in five years' time;
• there has been a significant increase in optimism since the last report of this kind in 2023;
• CEOs anticipate material investments in their businesses; and
• geopolitical and European wide regulatory risks are causing some unease.

The survey revealed that new products / new markets / new technologies are seen as opportunities while increased competition / keeping pace with technology / attracting talent are seen as threats.

Technology

The Report highlights that Irish insurers are actively investing in technology, especially when it comes to customer experience and back-office modernisation. However, the Report also notes that “technical debt” is a significant barrier to this, taking account of outdated systems and poor data integration which prevent the adoption of AI and machine learning.

The Report notes that there is a need for a balance between experimentation and oversight to support innovation and that industry leaders stress the need for stronger talent pipelines in digital and data / better support for Insurtechs and start-ups / more coherent government support, including grants and tax incentives.

The rapid expansion of Ireland’s Insurtech sector is also discussed, with funding highlighted as a key challenge which sees many firms looking to the US for growth capital. 

Ireland as a Location

The Report notes an improvement in views in this area since the 2023 report, highlighting the fact that insurance CEOs recognise the role of the regulator when it comes to maintaining financial stability – with the Report stating that most CEOs feel that the regulator’s oversight is proportionate to the nature, scale, and complexity of their business’ risks.

As regards Solvency II, Ireland’s framework is no longer seen as being significantly more gold plated than other locations.

Additionally, the Report notes the importance of political stability for insurance CEOs while access to the EU, language and culture are seen as key advantages. The cost of doing business in Ireland is also highlighted by the Report, encompassing compliance with European regulatory requirements and also inflation and general higher costs. 

In the last week of September 2025, six of Ireland’s financial services trade groups wrote to Robert Troy, Minister of State at the Department of Finance, setting out recommendations regarding enhancing Ireland’s competitiveness (“Letter”).

The Letter coincides with the closing of the Government’s Ireland for Finance Strategy (“Strategy”) 2026-2030 consultation, which among other matters, focuses on Ireland’s international competitiveness - for more information, see FIG Top 5 at 5 dated 24 July 2025. 

The Letter was jointly signed by the following trade groups (“Groups”):

• Banking and Payments Federation Ireland;
• Ibec’s Financial Services Ireland;
• the Irish Association of Investment Managers;
• Insurance Ireland;
• Irish Funds; and
• the Irish MiFID Industry Association.

In the Letter, the Groups have set out that:

1. there should be an improved communication framework with policymakers as part of the Strategy, proposing that the Central Bank of Ireland, the Revenue Commissioners and the Pensions Authority should sit on a committee comprised of industry and government;
2. the Strategy must include tax as an enabler to make sure that the tax environment remains competitive on a global scale, while also supporting a culture of retail investment; and
3. the Government must make changes to the way in which it taxes private asset funds so as to attract capital into the economy in order to finance housing and the development of infrastructure.

Next Steps

As noted above, the Consultation has now closed. It is expected that a draft report will be forwarded to Ministers for government by Q1 2026, and the Strategy published in H1 2026.

On 30 September 2025, the European Insurance and Occupational Pensions Authority (“EIOPA”) published a letter it had sent to the European Commission (“Commission”) (“Letter”).

The Letter deals with the Commission’s consultation (“Consultation”) on the level 2 amendments to the Solvency II directive. The Consultation was published on 18 July 2025 and closed on 5 September 2025, for more information, see FIG Top 5 at 5 dated 24 July 2025.

Concerns

The Letter notes that the Commission has taken many of EIOPA’s technical recommendations into account. However, EIOPA explains that it has “strong concerns” about the extensive capital relief that the Solvency II review, based on the already agreed level 1 changes and the proposed level 2 changes would provide. 

A particular concern for EIOPA relates to the fact that level 2 of Solvency II sets out the valuation of insurance liabilities and the calculation of capital requirements, with EIOPA maintaining that the level 1 agreement and the proposed level 2 changes would result in a significant reduction of quantitative requirements – something EIOPA maintains is not technically justified.

In addition, EIOPA points to the risk margin of insurance liabilities which would be reduced by 39%, with the Letter stating that this goes beyond what is necessary according to the level 1 agreement.

Competitiveness

The Letter expresses EIOPA’s support for the boosting of economic growth and competitiveness in Europe, noting that the insurance industry is well placed to contribute to these goals, as a long term investor.

Resilience

The Letter goes on to reiterate the resilience that the insurance sector has shown over the last number of years, owing to the strong foundation provided by Solvency II. However, EIOPA cautions that if capital requirements are lowered to the extent proposed, then that resilience may be eroded and the capital that has seen the industry through challenging times will not be available when the next crisis occurs.

EIOPA states that lowering the resilience of the insurance sector, while incentivising risk taking, is a cause for concern, especially where geopolitical and economic uncertainty is on the rise.

Stability

EIOPA concludes the Letter by highlighting the main objectives of Solvency II as the protection of policyholders and financial stability and that any revision of the framework needs to be “risk and evidence based taking those objectives into account.”