InsTech.ie’s CEO Gary Leyden explores the opportunities that AI presents to the Irish insurance industry.

The Irish insurance industry is in the midst of a shift from talking about innovation to proving it in practice. Ireland hosts the European operations of many of the world’s largest insurers and technology multinationals, alongside a strong base of academic research and a regulatory environment that is internationally respected.

The challenge is not ambition or capability. It is execution. Ireland has the capital, the regulatory credibility and the operational footprint, yet too much innovation still stalls at pilot stage. Ideas are tested, discussed, extended and deferred, rather than deployed at scale. In a market facing rising climate volatility and cost pressure, delay is no longer neutral. It compounds risk.

The cost of that delay is already being felt. Climate-related losses are rising sharply, with global insured losses from natural catastrophes reaching approximately $137bn in 2024, according to Swiss Re research. In Ireland, repeated flooding events are accelerating risk faster than traditional planning, pricing and product development cycles can adapt. Delayed innovation is not simply cautious, it is expensive. It increases exposure to loss by leaving insurers reliant on slower processes, older models and systems that cannot be tested early or adapt quickly, driving higher volatility, slower response and greater downstream costs when shocks materialise.

This is where Ireland’s Digital Sandbox for Insurance comes into focus. Similar models exist internationally, including regulatory sandboxes operated 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 trial new systems safely before full-scale implementation – complementing, not replacing, regulatory supervision.

It removes the main excuse insurers use for not testing new technology, operational risk. It narrows the gap between technical promise and commercial adoption.

The friction lies between innovators and incumbents – start-ups lack access to real insurance environments, while insurers hesitate to test early-stage technology safely. The result has been extended discussion with limited deployment, a pattern that a structured testing environment is designed to change. This is often referred to as ‘proof-of-concept purgatory’, where innovation ambition hits a wall of big corporate conservatism.

Proof of delivery is already visible across Ireland’s insurtech ecosystem. Dimply is modernising customer engagement and distribution. Inaza is enhancing underwriting performance through advanced data and automation. Blink Parametric has deployed real-time parametric solutions across global markets. Docosoft is streamlining regulatory and operational workflows for major insurers. These firms show that Irish innovation can scale. A sandbox accelerates that trajectory, helping earlier-stage companies prove readiness faster and enabling insurers to move from evaluation to adoption with confidence.

Reaching ‘tier one’ insurers

This is not simply about adopting new tools, but about changing decision velocity by shortening procurement cycles and moving from evaluation to deployment. Without that shift, infrastructure alone will not move the dial. Insurance, however, carries additional structural friction, from legacy systems and data constraints to complex procurement and compliance obligations, which can slow adoption even when technology performs well.

Breaking into ‘tier one’ insurers remains the single biggest barrier to scaling Irish insurtech – not because the technology fails, but because procurement cycles, risk aversion and internal complexity slow decision-making to a crawl. Building infrastructure that unlocks that access would be transformative for the more than 100 Irish insurtechs in the national cluster, while also signalling internationally that Ireland is serious about competing in an industry undergoing profound change.

A tier-one insurer recently used the secure sandbox to test AI-powered fraud detection in conditions that mirrored real investigations but without exposing customer data. The company’s fraud investigations were distressingly slow, manual and resource-intensive, barely keeping up with rising claim volumes. Why does this matter? Because global insurance fraud costs exceed $25bn annually. Insurers know AI could help detect fraud better and faster.

The uncomfortable truth is that the problem has never been about the technology. The real issue has been organisations’ willingness to open their minds to the future and accept that the old ways simply cannot keep up. By using the sandbox environment, the insurer reduced its proof-of-concept phase from 12-18 months to just eight weeks. That’s the difference between dial-up internet and fibre broadband. If AI testing can happen in two months, executives should be asking why they’d want to still move at the pace of another era.

Ireland likes to describe itself as a global hub for innovation, but a hub is only a hub if decisions actually happen there. The reality is that Ireland already runs major operations for global insurers, handles complex regulatory engagement and holds deep expertise, yet it is still too often treated as the place where strategy is executed rather than where it is shaped.

If Ireland is trusted to run the systems, manage the risk and operate the infrastructure, then it should also be trusted to run the experimentation. The Digital Sandbox removes the usual excuses. The question now is whether all stakeholders – insurers, policymakers and industry – will act like leaders and move 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 start-ups to embed innovation in regulated sectors. He focuses on building the conditions for innovation to scale within insurance, leading initiatives such as Ireland’s Digital Sandbox for Insurance, supporting a nationwide network of over 120 insurtech companies developing AI-driven solutions.

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