Mr Eoin Caulfield
Partner

Eoin Caulfield is Head of Insurance at William Fry. He works with insurance clients on Irish and European transactional and regulatory matters.

Eoin is a member of the Insurance Institute of Ireland and the British Insurance Law Association. He is a past member of the International Bar Association’s insurance committee and an Affiliate of the Society of Actuaries in Ireland.

Eoin and the William Fry Insurance Department are ranked “Band 1” in Chambers, Legal 500 and the other leading journals. William Fry is a founder member of the InsTech.ie initiative.

Mr Niall Campbell
Consultant

Niall Campbell is a Consultant in William Fry’s Insurance & Reinsurance Department. He has a wealth of experience of over 14 years of advising insurance and reinsurance groups on all aspects of their business. Niall also has experience of advising on UK insurance regulation, giving him a unique perspective in the Irish legal market.

Niall is ranked by Legal 500 as the Rising Star for Insurance and rated as Highly Regarded in IFLR 1000. He is a member of the Insurance Institute of Ireland and the British Insurance Law Association.

Mr Ian Murray
Partner

Ian is a Partner in William Fry’s Insurance & Reinsurance Department. He has a wealth of experience advising (re) insurers and brokers and on all aspects of their businesses including corporate governance, M&A transactions, restructurings, joint ventures, and regulatory and compliance matters.

He was formerly the Director of Corporate and Regulatory Affairs at the SCOR Global Life Ireland, where he managed the firms’ regulatory relationship with the CBI and was responsible for corporate governance matters and the company secretarial requirements for Irish group companies.

Key Developments & the Latest Trends in the Irish (Re)Insurance Sector

 Introduction

For more than thirty years, Ireland has been an appealing destination for international (re)insurance groups seeking to establish a European Union (“EU”) presence. The sector remains diverse and internationally focused, providing capacity in a wide range of geographical markets. International (re)insurance groups are attracted by Ireland’s status as an English-speaking EU jurisdiction, with a stable political environment and a common law tradition. It benefits from what is often viewed as a strong yet effective insurance regulator in the Central Bank of Ireland (“CBI”). Complementing these advantages is access to a sophisticated financial services ecosystem with a deep pool of skilled talent including professional advisers and service providers.

Ireland’s insurance sector, as with other countries, faces ongoing regulatory changes. With a dynamic landscape shaped by technological advancements and evolving customer expectations, there are both opportunities and challenges. We identify here some key developments impacting Ireland’s insurance sector and recent market trends. These include:

1. EU Cross-Border Restructuring – Following transposition of the EU Mobility Directive on cross-border conversions, mergers and divisions, we see the new “cross-border conversion” process being increasingly used by EU groups.
2. Increased Digitalisation of the Sector (including use of artificial intelligence) – The CBI’s 2025 supervisory priorities signpost that increased digitalisation of the insurance sector remains a key focus. The sector is increasingly leveraging technology to enhance efficiency, improve customer experiences and drive innovation. This is especially in terms of the interactions between artificial intelligence (“AI”) and insurance.
3. Key Legislative Developments – The growth of regulation at EU and national level remains a focus. Regulatory developments anticipated for the year ahead include:

• the CBI’s revised Consumer Protection Code;
• the EU Insurance Recovery and Resolution Directive; and
• the EU Corporate Sustainability Reporting Directive and the EU Corporate Sustainability Due Diligence Directive.

EU Cross-Border Restructuring: A New Era for (Re)Insurance M&A Activity?

Ireland has implemented the EU Mobility Directive through the European Union (Cross-Border Conversions, Mergers and Divisions) Regulations 2023 (“Mobility Regulations”). The Mobility Regulations introduce new procedures when contemplating EU cross-border transactions (both into and out of Ireland). These procedures, known as cross-border divisions and cross-border conversions, offer companies a more streamlined and straightforward procedure when considering the movement of businesses and assets from one EU Member State to another. The Mobility Regulations also introduce simplified rules for cross-border mergers (a process which has been in existence for 15 years or so). We anticipate that the new cross-border mechanisms will prove popular for groups considering EU restructuring options. Given Ireland’s attractiveness for (re)insurance businesses, the country may be a net beneficiary of this new regime as groups consider moving activities into Ireland.

In the past, groups involved in cross-border business, when contemplating changing head office location to or from Ireland, would most likely need to engage in a complex and costly cross-border merger transaction. Given the requirement to merge into an entity in the EU transferee jurisdiction, it involved the dissolution of the transferring company and was also treated as a separate Solvency II (re)insurance transfer. For Ireland, this means requisite court sanction in most contexts.

This is now no longer necessary in all cases. Although the cross-border merger approach remains and should continue to prove a useful restructuring tool where, for example, a group wants to consolidate at least two existing EU (re)insurers, the Mobility Directive regime introduces the new “conversion” approach.

Notwithstanding many similarities with the cross-border merger process, the fact now that a transferring company maintains its same legal personality means it is a more straight-forward and cost-effective way for (re)insurers to change jurisdiction within the EU. The process effectively allows a corporate entity to be ‘dragged and dropped’ from one Member State into another. The continuance of the corporate entity in the new EU jurisdiction is possible without the requirement to individually transfer the (re) insurance business or other assets, contracts, employees or liabilities.

Importantly, the conversion process is a corporate one. It does not dispense with applicable Solvency II (re)insurance regulatory elements. From a regulatory perspective, a transferring (re)insurer moving EU jurisdiction will need to apply for authorisation in that ‘receiving’ EU Member State (and renounce its existing authorisation in the ‘departing’ EU Member State). In an Irish context, this process would be undertaken in parallel with the conversion process under the Mobility Regulations. Early engagement with the CBI would be advisable.

Typically, from an Irish perspective, a regulatory new authorisation application filed with the CBI may take between 9 and 12 months from the date of filing a complete submission. Although EU (re)insurance regulators may not welcome the prospect of “jurisdiction shopping” that may be amplified by the Mobility Directive, with a good business case and underpinning rationale (e.g. a desire to move to an EU jurisdiction with a larger insurance sector infrastructure, such as Ireland) the expectation is that regulators will be open to such conversions.

Digitalisation and AI: Transforming the Future of Insurance

While the increased digitalisation of the insurance sector is not unique to Ireland, it is worthy of discussion given Ireland’s status as an international financial services centre and a nucleus for global technology firms. Ireland has a growing reputation as a FinTech hub. In recognition of this growth, the CBI has identified monitoring of the digitalisation of the insurance sector, including the increased use of AI in underwriting and pricing processes as one of its 2025 priorities. EIOPA’s Consumer Trends Report 2024 similarly notes that national competent authorities expect AI to have a “transformative impact” on the insurance sector.

AI is anticipated to significantly transform the sector by enhancing risk assessment, pricing and operational efficiency. This transformation includes more rapid and intuitive claims management from the customer’s perspective. Innovations such as robo-advisors and chatbots provide continuous support and streamline policy and claims handling processes. Recent advancements in Generative AI technology (“Gen AI”) are expected to amplify and expedite the impact of AI within the sector, particularly in non-life insurance lines such as motor, health, and household insurance. The benefits derived from Gen AI parallel those of other AI systems but are more pronounced; they encompass increased efficiency in digital distribution of insurance, customisation of products to align with consumer preferences, and enhanced risk coverage due to more accurate risk assessments.

The EU AI Act seeks to create a legal framework that ensures that AI systems are safe, respects fundamental rights, fosters innovation and introduces strict rules on the deployment and use of certain AI systems. The AI Act applies with direct effect, with the first rules on prohibited AI systems taking effect since 2 February 2025 and subsequent rules taking effect on a phased basis. Many of the use cases of AI within insurance, particularly within life and health insurance are deemed high-risk and are subject to onerous requirements on usage. These requirements include the use of data governance practices to avoid biases and ensure transparency in how AI outputs are interpreted. To manage the potential overlap with existing insurance regulation, limited derogations are introduced, particularly for entities regulated by Solvency II.

As with international developments, Irish domestic regulatory changes are designed to be “technology neutral”. This includes the Consumer Insurance Contracts Act 2019, which relates to policy wordings and dealings in areas such as claims, and the CBI’s revised Consumer Protection Code (the “CPC”). All require varying degrees of protection of customers’ interests. The CBI is particularly live to risks associated with the use of customer data in combination with AI. The combination has the potential to create information mismatches, where the insurer has much greater knowledge about a customer. This can ultimately impact on how insurance products are marketed, priced and sold. In the current CPC consultation, the CBI emphasises that regulated firms should not use data and profiling to identify behaviours, habits, preferences or biases for the purposes of exploiting these to target customers, resulting in customer detriment.

The CBI’s Deputy Governor of Financial Regulation in a recent interview noted that AI remains a very live issue which requires a “back-to-basics” approach by firms. We anticipate that as the CBI continues to think about the implementation of the AI Act and the implications of AI on policyholders and customers more broadly, in Ireland it will remain a key talking point in 2025.

Further Regulatory Evolution: Customer Protection, IRRD, CSRD and beyond

It is impossible to ignore the growth of regulation at both an Irish domestic and an EU level. This is imposing a high burden on insurers. According to Insurance Europe, the number of legislative texts affecting insurers at a European level has grown from 12 legislative texts in 2012 to an anticipated 70 in the near future. The expectation is that Ireland’s well-resourced insurance sector will be better equipped than some jurisdictions to cope with increasing regulatory expectations.

We devote attention below to some key regulatory developments that are anticipated over the coming year. These include the CBI’s revised CPC; the EU Insurance Resolution and Recovery Directive (“IRRD”), whose influence on the Irish regulatory landscape remains to be fully understood; and the EU Corporate Sustainability Reporting Directive (“CSRD”) alongside the EU Corporate Sustainability Due Diligence Directive (“CSDDD”).

Revised CBI Consumer Protection Code

The CBI is currently undertaking a review of the CPC, with publication of the finalised text expected during 2025. This is a similar document to the UK’s “COBS” sourcebook addressing conduct matters. For those in the insurance sector, there is a significant amount of work in getting on top of the new regime. This includes considering the cross-sectoral dimensions that must be complied with by all financial services firms as well as the specific pieces under the revised CPC, applicable to insurers (and, in some cases, reinsurers) and intermediaries. The assessments, gap analyses and related adjustments will need to be done between now and 2026.

A lot of what appears in the revisions will be familiar to those in scope of the existing CPC. The duty to act in the best interest of customers remains but it will be further developed through a new express duty to “secure customers’ interests”. This reflects a move by the Irish regulator, like in other jurisdictions, more towards ensuring there are “positive outcomes” for policyholders. It is like the UK’s recent “consumer duty” changes and is a recognition of the increasing complexities, including due to technology, in the regulation of the financial services sector.

A particularly notable aspect of the CBI’s new regime is that, whilst described as relating to a “consumer” code, some of the changes would extend to B2B relationships. This would happen through so-called Standards for Business which form part of the revised CPC. The area is also inter-linked with Ireland’s recent introduction of a “senior managers” regime. Again, this is similar to the UK and other jurisdictions. In Ireland this is through a so-called “Individual Accountability Framework”. As well as new areas (for insurers) such as responsibility mapping, certain broad duties under “conduct standards” will apply to a broad range of firms. Under the proposed CPC changes, some of these changes may affect not just consumer relationships but also certain B2B dealings (e.g. by reinsurers).

EU Insurance Recovery and Resolution Directive

The IRRD aims to establish harmonised recovery and resolution tools and procedures, to ensure that insurers and relevant authorities in the EU are better prepared for situations of significant financial distress. It will facilitate the early and quick intervention of the authorities, especially in cross-border contexts. It entered into force at EU level on 28 January 2025 with national transposition required within 24 months. In 2021, Ireland introduced dedicated regulations requiring pre-emptive recovery planning by Irish authorised (re) insurers along with supporting CBI guidance. To a certain extent, we await to see the impact of the transposition of the IRRD on our domestic regulations, and if it meets the Department of Finance and CBI’s current expectations for a resolution framework.

EU Corporate Sustainability Reporting Directive and EU Corporate Sustainability Due Diligence Directive

Like other jurisdictions, Ireland has implemented the various EU initiatives related to sustainability and ESG. For (re)insurer groups, this is now seen in action through the CSRD as concerns applicable sustainability reporting requirements. While the focus of the CSRD is on modernising and strengthening the rules concerning the social and environmental information that companies have to report, the CSDDD is more onerous in its expectations. It means identifying and addressing areas such as adverse human rights and environmental impacts of a group’s actions. Whilst principally affecting an Irish (re)insurer company, importantly within group structures, both the CSRD and CSDDD can have a potential application both inside and outside European operations. Irish (re)insurers like other European insurers are still considering the implications of these directives. This will include consideration now as well of European Commission’s proposed omnibus simplification package, aimed at simplifying sustainability reporting obligations.

Conclusion

The EU and Irish (re)insurance sectors continue to evolve, driven by regulatory change and technological advancements. The transposition of the EU Mobility Directive and changes such as increasing digitalisation in the sector and the use of AI will be a momentum for this. With the advancements come challenges, particularly in the realm of regulatory compliance.