InsTech.ie CEO Gary Leyden explores the opportunities that AI brings to the Irish insurance industry.
The Irish insurance industry is in the midst of moving from talking about innovation to proving it in practice. Ireland hosts the European operations of many of the world’s largest insurance companies and many technology companies, as well as a strong academic research base and an internationally recognized regulatory environment.
The challenge is not ambition or ability. The execution. Ireland has the capital, regulatory credibility and methodology, yet many innovations remain at the experimental stage. Ideas are tested, discussed, expanded and revised, rather than implemented at scale. In a market facing increasing climate change and cost pressures, delays are no longer neutral. It involves risk.
The cost of that delay is already being felt. Weather-related losses are on the rise, with global insured losses from natural disasters reaching nearly $137bn by 2024, according to Swiss Re research. In Ireland, repeated flooding events accelerate risk faster than normal planning, pricing and product development cycles can adapt to. Delayed innovation is not only prudent, it is costly. It increases exposure to loss by leaving insurers reliant on slow processes, outdated models and systems that cannot be tested early or adapted quickly, driving high volatility, slow reactions and high downstream costs when panic strikes.
This is the focus of the Ireland Digital Sandbox for Insurance. Similar models exist around the world, including regulatory sandboxes used by authorities such as the UK Financial Conduct Authority. Ireland’s Digital Sandbox, however, is not a regulatory sandbox. It is a market-led testing environment that allows firms to test new systems safely before full implementation – complementing, not replacing, regulatory oversight.
It removes the main excuse used by insurance companies for not testing new technology, operational risk. It bridges the gap between technology promise and commercial adoption.
The conflict is between the innovators and the incumbents – startups have no access to real insurance areas, while insurers are hesitant to test early-stage technology safely. The result has been an extended discussion and limited use, a pattern the planned testing site is designed to change. This is often called ‘proof-of-concept purgatory’, where the desire to innovate hits the wall of big business conservatism.
Evidence of delivery is already being seen across Ireland’s insurtech ecosystem. Dimply modernizes customer interaction and distribution. Inaza improves underwriting performance through advanced data and automation. Blink Parametric has implemented real-time parametric solutions in all global markets. Docosoft improves regulatory and operational workflows for major insurance brokers. These companies show that Irish innovation can grow. The sandbox accelerates that process, helping early stage companies demonstrate readiness quickly and allowing insurers to move from assessment to discovery with confidence.
Access to ‘tier one’ insurance
This is not just about adopting new tools, but about changing the speed of decision making by shortening purchase cycles and moving from testing to implementation. Without that change, infrastructure alone will not eliminate dialing. Insurance, however, carries additional structural conflicts, from legacy systems and data barriers to complex purchasing and compliance obligations, which can limit adoption even when technology works well.
Disengagement from ‘tier one’ insurers remains the single biggest obstacle to growing Irish insurtech – not because the technology is failing, but because procurement cycles, risk underestimation and internal complexity slow decision-making to a crawl. Building the infrastructure that opens up that access could be transformative for Ireland’s more than 100 insurtechs in the national cluster, while it is noted internationally that Ireland is determined to compete in an industry undergoing significant change.
A first-tier insurer recently used a secure sandbox to test AI-powered fraud detection in scenarios that mimic real investigations but without exposing customer data. The company’s fraud investigations were woefully slow, manual and resource intensive, not keeping up with the growing number of claims. Why is this important? Because global insurance fraud costs more than $25bn a year. Insurers know that AI can help detect fraud better and faster.
The uncomfortable truth is that the problem has never been about technology. The real problem has been the willingness of organizations to open their minds to the future and accept that the old ways cannot keep up. By using a sandbox environment, the insurer reduced the proof-of-concept phase from 12-18 months to just eight weeks. That’s the difference between dial-up internet and fiber broadband. If AI testing is possible in two months, managers should ask why they still want to move at a faster pace.
Ireland likes to describe itself as a global center for innovation, but a center is only a place if the decisions happen there. The reality is that Ireland already runs large operations for the world’s insurers, manages complex regulatory interactions and has deep expertise, yet it is still often regarded as a place where strategy is made rather than where it is built.
If Ireland is trusted to manage systems, manage risks and operate infrastructure, it should also be trusted to run inspections. Digital Sandbox eliminates common excuses. The question now is whether all stakeholders – insurers, policy makers and industry – will act as leaders and keep up with the times.
By Gary Leyden
Gary Leyden is CEO of InsTech.ie, where he leads the development of Ireland’s national insurtech ecosystem, working across industry and startups to embed innovation in regulated sectors. He focuses on creating the conditions for innovation to balance insurance, leading initiatives such as the Ireland Digital Sandbox for Insurance, which supports a national network of over 120 insurtech companies developing AI-driven solutions.
Don’t miss out on the information you need to succeed. Sign up for Daily BriefSilicon Republic’s digest of must-know sci-tech news.
