Insurance Licence Authorisation: Part I - Strategic Commitment
Introduction
Authorisation to operate as an insurance undertaking in Ireland is often framed as a regulatory step. In practice, it is a strategic decision that influences management structures, capital deployment, and how risk is owned and supervised over time.
This first part in a five-part the series sets out why authorisation should be approached as a strategic commitment, not a compliance exercise. It examines Ireland’s role as a European insurance hub and the level of organisational readiness required before engaging with the regulator.
Securing authorisation to operate as an insurance undertaking from the Central Bank of Ireland (‘CBI’) is a substantial endeavour. The application process is rigorous, requiring prospective insurers to submit extensive documentation that demonstrates robust governance, sound risk management policies, and a clearly articulated business strategy. This includes the preparation of detailed financial projections, actuarial assessments, and operational plans, all of which must meet the high standards established under the EU's Solvency II framework.
Nevertheless, while the route to authorisation is lengthy and challenging, the rewards are considerable. Possession of a CBI-issued insurance licence represents a valuable strategic asset. It not only signals the highest standards of governance and reliability to clients, partners, and investors, but also provides access to the entire EU and EEA markets through passporting rights.
However, all applicants should carefully evaluate their business case and level of commitment before embarking on this process.
Insurance Sector in Ireland: An Overview
Ireland has emerged as one of the most dynamic and attractive insurance centres in Europe, positioning itself as a gateway to the EU and EEA markets (comprising 30 member nations). Today, the country ranks as the fourth-largest insurance sector in the European Union, a remarkable achievement for a nation of its size and a clear testament to its global reach and reputation.
The Irish insurance and reinsurance industry serves as a strategic international hub, supporting over 35,000 skilled professionals, many of whom possess deep expertise in complex, cross-border markets. One of Ireland’s most compelling advantages is its access to the EU Single Market. Irish insurers can offer products and services across the entire EEA under passporting rights, a benefit that has made Ireland even more attractive in the post-Brexit landscape, with Ireland now standing as the primary English-speaking nation in the EU. For global players, establishing a presence in Ireland provides a stable and highly effective base for reaching clients across Europe. While Irish-based insurers can no longer automatically passport into the UK post-Brexit, the establishment of an Irish undertaking with a UK branch has become a well-developed solution, favoured by many internal groups seeking to access both the EEA and UK markets.
The country’s competitive tax regime is another cornerstone of its success. With a 12.5% corporate tax rate on trading income (15% for large multinationals under OECD Pillar Two rules), Ireland remains one of the most business-friendly locations in Europe. Combined with a supportive environment for innovation, R&D, and intellectual property, this has encouraged many of the world’s leading insurers and reinsurers to choose Ireland as their European home.
Equally important is the regulatory environment. The CBI, operating under the EU’s Solvency II framework, provides a supervisory regime that is rigorous, transparent, and internationally respected. This strong oversight inspires confidence among investors and policyholders, while the regulator’s openness to dialogue ensures the framework remains proportionate and forward-looking. Areas such as sustainable finance and digital innovation are being actively embraced, demonstrating Ireland’s ability to adapt to new market trends while maintaining the highest standards of governance.
There are approximately 180 regulated (re)insurance undertakings in Ireland, which collectively write over €100 billion in premium per annum.
In short, Ireland offers insurers the best of both worlds: the scale and credibility of a major European hub, combined with the agility and welcoming business climate of a small, open economy.
Timelines
The CBI targets a processing time of three months for complete insurance licence applications. For more complex submissions, this may extend to six months.
It is important to emphasise that the CBI’s service level agreement (‘SLA’) applies only to complete applications.
Strategic Commitment
One of the most common reasons authorisation projects struggle is that they are framed internally as regulatory exercises rather than strategic commitments. This framing is subtle, but its consequences are material. From the perspective of the CBI, the application process is not about whether a firm can assemble documentation. It is about whether the proposed undertaking can be supervised effectively over time.
This is why authorisation demands sustained engagement from senior management and the board. Strategic decisions around underwriting appetite, reinsurance strategy, outsourcing, capital deployment, and growth, must be capable of being made and defended within the Irish entity itself. Governance structures, risk ownership, and escalation paths cannot exist solely on paper or outside the jurisdiction.
Firms that succeed in authorisation are typically those that have already internalised this reality. They approach the process as the formalisation of a business they genuinely intend to run as a regulated insurer, rather than as a gateway to unlock a particular transaction or market opportunity.
Understanding the Commitment Before Proceeding
Before embarking on the authorisation process, firms should be clear-eyed about the level of commitment required. This extends well beyond capital thresholds or regulatory minimums.
Authorisation requires:
Time and attention from senior leadership, often over a prolonged period
Credible, locally embedded governance, with real decision-making authority
Capital that can withstand challenge, including under stress scenarios
Operational maturity, particularly around risk management, compliance, and oversight of outsourced activities
These requirements persist long after authorisation is granted. In many respects, the most demanding phase begins after approval, once the undertaking is subject to ongoing supervision, thematic reviews, and periodic deep dives into its business model and controls.
For this reason, authorisation is not appropriate for every business model. Firms whose strategies depend on minimal risk retention, highly centralised group decision-making, or short-term market entry may find that alternative structures—such as MGA arrangements, fronting partnerships, or captive solutions—are better aligned with their objectives.
Conversely, for organisations with a genuine long-term commitment to building a regulated insurance platform, authorisation can deliver significant strategic value. The key is ensuring that this commitment is understood and accepted at board level before the process begins, rather than discovered partway through it.
Part I Summary
Where that strategic commitment is clear, authorisation can deliver lasting value and regulatory credibility. Where it is not, alternative structures are often more appropriate.
In the Part II of this article, we move from strategic intent to execution, examining how the Irish authorisation process operates in practice, and where applications most commonly encounter difficulty.