Most recently, there have been noticeable developments in reinsurance including inflation, storm losses and protection gap concerns. These areas are already being tested globally and are also prevalent in the Irish reinsurance landscape.
Measured by premium income, the overall industry has also grown considerably in recent years - from €73 billion in gross written premium in 2017 to €109 billion in 2024.Inflation & rising storm losses
In recent years reinsurers have been faced with intensifying pressure from two converging forces; high inflation and increasing storm-related losses. The combination of inflation-driven cost escalation and increasing storm severity poses one of the most significant challenges to reinsurers in decades.Coastal development, expanding suburbs in flood zones, and industrial hubs in storm-prone regions all increase potential insured losses with far larger storm related losses due to denser and more valuable developments. Pricing for repair and rebuild works, building materials, labour, machinery have risen sharply, meaning that the ultimate cost of property claims is often far higher than originally reserved and as such grows the need for reserve strengthening.
Recent catastrophic weather events due to climate change are having significant impacts on the reinsurance market and reinsurers are absorbing mounting losses as a result of natural events, in particular, storms. For example, Storm Isha hit in January 2024 - Isha resulted in damages which required the insurance industry to pay out significantly across Ireland and the UK. Insurers estimated that the total cost of claims following Storm Éowyn in January 2025 could reach as much as €300 million with up to 25,000 claims.
Protection gap concerns
Irish property insurers have faced reduced coverage by reinsurers especially in flood risk in Ireland. There has been a general increase of flooding arising from climate change affecting properties where flooding has not previously occurred. Properties in low lying urban centres and cities in Ireland now face new challenges against such risks. Ireland's main insurance companies have expressed concern and have raised their concerns with the Irish Government to discuss future flood cover. This has meant that trends in the Irish reinsurance market show that the appetite for coverage of increasing natural catastrophes has reduced.Aggregation
The Irish High Court’s decision in Chubb European Group SE v Perrigo Company PLC [2024] IEHC 9 which is now a leading Irish authority on aggregation clauses in contracts of insurance. The judgment offers a detailed and notably narrow interpretation of the words “similar” and “related” wrongful acts. The Court held that these words should be narrowly interpreted, which carries significant implications for insurers, corporate policyholders, and brokers alike.Looking forward – implications for the insurance market
- This judgment reinforces the necessity for a precise and narrow interpretation of aggregation clauses in insurance contracts. Insurers and insured parties must meticulously draft and negotiate the specific language of such clauses to ensure clarity in coverage scope.
- A high threshold for aggregation: This judgment solidifies a narrow interpretive path for aggregation clauses in Ireland. Insurers seeking to aggregate claims will need to demonstrate concrete factual, temporal, and transactional overlap. The terms “similar” and “related” in the context of aggregation clauses are narrowly defined. For wrongful acts to be considered “similar or related”, they must share a unifying factor.
- The consequences for policyholders and insureds are that the narrow interpretation applied may reduce the risk of large-scale aggregation but may increase exposure to multiple retentions and limits across several years.
- The case underscores the commercial importance of drafting specificity. If parties intend broad aggregation, this must be articulated explicitly.
Insurance Reform Action Plan
In July 2025, the Action Plan for Insurance Reform 2025-2029, published by the Domestic and Indirect Tax Division of the Department of Finance, signals a stronger push for comprehensive development within the insurance industry.
This new initiative is the successor to a 2020 plan and is designed to build on its foundations to tackle the long-standing issues of affordability and availability in the Irish insurance market.
The 2025-2029 Action Plan is built on six key pillars designed to create a more stable and competitive insurance market. Its six core themes are:
1. Transparency and affordability
2. Competitiveness and availability
3. Fraud
4. Innovation and skills
5. Climate protection gap
6. Legal reform
While all six areas are crucial to the overall strategy, it is the focus on legal reform that is set to have the most significant impact on the day-to-day operations of legal practitioners and the claims process for clients.
The previous plan successfully led to reductions in motor insurance premiums and brought more consistency to personal injury awards; the new action plan represents the next phase of a comprehensive reform agenda.
Third party funding in Ireland
Ireland has very much been an outlier with regards to third party funding. This is because the Irish jurisdiction places very strict rules in both tort and common law on maintenance and champerty which has historically shaped Ireland's approach towards third party funding. This strict approach to third party funding was evidenced by the Supreme Court Decision of Persona Digital Telephony Limited and Sigma Wireless Networks Limited v The Minister for Justice, Ireland & Ors.
Following on from the judicial jurisprudence, the legislature intervened to amend Ireland's Arbitration regime by enacting the Courts and Civil Law (Miscellaneous Provisions) Act 2023 which was signed into law in July 2023. Following this enactment a new Section 5A was inserted into the Arbitration Act 2010 which disapplies the tort and common law offences of champerty and maintenance to “dispute resolution proceedings”. This amendment permitted third party funding for international commercial arbitration.
Going forward, the introduction of Section 5A to the Arbitration Act 2010 may extend the legal framework to allow third party funding in a wider range of proceedings. This is evidenced by the Law Reform Commission Consultation paper in 2023 on third party funding which gives an overview of the Models of Regulation to apply to third party funding and to combine Court approval in some cases (particularly class actions).
The Representative Actions for the Protection of the Collective Interests of Consumers Act 2023 provides for third party funding of representative actions “insofar as permitted in accordance with law”. The 2023 Act transposed into Irish law the Collective Redress Directive (EU) 2020/1828, which seeks to harmonise the regime for collective actions to be brought on behalf of EU consumers. However, the 2023 Act does not change the long-standing position under Irish law prohibiting the funding of litigation by third parties (who have no interest in the dispute).
While Ireland remains an outlier with regards to third party funding, the recent changes in legislation will no doubt enhance international commercial arbitration and this has formed part of the growing momentum towards broader legal reform to allow third party funding further freedom in domestic arbitrations either by subsequent legislative reforms, further development in jurisprudence in the area, or most likely a mixture of both.
In late 2025, the regulation of third party funding is back on the EU agenda, and accordingly it remains to be seen in 2026 what direction Ireland will take.
