In this briefing note we will discuss some of the key considerations for companies deciding on a location to establish a European (re)insurance entity. We will look at Ireland as a sample location and provide information on the application process, drawing on our extensive experience of past and current licence applications.

New locations, new considerations

Set out below are some of the key factors to consider when choosing a location for a (re)insurance entity.

Market access

Market access is critical for any new location. Companies will often want some or all of the following:

• Full access to all EU financial services markets.
• A territory that can access markets outside the EU.
• A location that has an existing international cross-border market in terms of access to policyholders and access to reinsurance.

Practical aspects

Factors such as taxation and regulation (which we cover below) are obvious criteria for assessing possible locations, but some of the practical aspects related to selecting a location can be just as important.

• Language: Fluent English will be a requirement for many companies, particularly those coming from the UK or the US.
• Time zone: Consider the time difference compared to other international markets.
• Legal regime: The impact on any legal contracts should be considered. The UK and Ireland operate on a common law system, unlike mainland Europe.
• Accessibility: Transport links are another key consideration.
• Choosing a location that already has a well-developed international financial services sector will minimise the level of risk faced.

Workforce

Any potential location should offer a wide pool of local skills, knowledge and expertise, but should also be suitable for existing employees who may be relocating.

• Well-educated workforce, with a focus on financial skills.
• Large pool of highly skilled employees who have experience working in the insurance industry. Availability of specialised roles such as actuarial expertise or tax and legal knowledge should be considered.
• Attractiveness of the new location for existing staff or for attracting staff from other territories.
• Quality of life: Housing, education and healthcare as well as the range of cultural, social, and sporting amenities should be considered.

Regulation

Solvency II has done much to harmonise the regulatory landscape across Europe; however, regulatory differences still exist between locations.

• Familiarity of the regulator in dealing with this type of business as well as cross-border companies and business models.
• Experience of the regulator in processing new authorisation applications as well as the attitude and willingness of the regulator to work with new applicants.

Taxation

EU member states set taxation at a local level, so each territory will have a different regime.

• Corporate tax rates are a key consideration.
• Grants and financial assistance programmes or advice may be available to encourage foreign direct investment or to incentivise the creation of new businesses and jobs.

Example location: Ireland

Some of the most popular locations considered for new (re)insurance entities include Dublin, Luxembourg, Brussels, Frankfurt, Paris, Malta, Bermuda, Barbados and the Isle of Man.

Every business is different and therefore the choice of location must be tailored to each individual company. Some of the key considerations for Ireland are discussed below. While Ireland won’t be the location of choice for every entity, Ireland offers many benefits ranging from practical aspects, such as language and the quality of the educated workforce, to fiscal and regulatory advantages.

Market access

Ireland has full access to all EU financial services markets and is fully committed to remaining in the EU.

Practical aspects

Ireland ranks highly in terms of practicality. It is the only native-English-speaking country within the EU and is in the same time zone as the UK (GMT).

Ireland operates on a common law basis similar to the UK. Ireland also has flexible labour laws.

Ireland is very accessible, with frequent flights to European and US cities.

Workforce

Ireland is renowned for having a well-educated workforce and it is the only country in the EU with unrestricted access to both the EU and UK labour markets.

A large pool of highly skilled people work in insurance in Ireland, with 35,000 employed directly or indirectly in the industry.

Regulation

The Central Bank of Ireland (CBI) is responsible for financial regulation in Ireland. The CBI is seen as a strong, independent regulator with international credibility and relationships with the European Insurance and Occupational Pensions Authority (EIOPA), national regulators and EU supervisors.

Taxation

Ireland offers a competitive corporate taxation rate of either 12.5% or 15.0%.¹ Successive Irish governments have repeatedly committed to the retention of Ireland’s corporate tax rate and sovereign control over this. Other incentives and assistance are available to encourage job creation.

Authorisation applications

Any undertaking wishing to carry out the business of insurance or reinsurance must first obtain authorisation from the relevant regulator. This is done through a formal authorisation application.

The authorisation process will differ from country to country. Details of the application process for authorisations in Ireland are discussed below.

Our experience has shown that there is a lot of interaction between the applicant, their representatives and the CBI throughout the application process. The CBI itself says that it ‘aims to make the application process an efficient one, however, it must be stressed that it is not a one-step process; rather, it is an iterative process involving contact and consultation.’

To this end it is useful for potential applicants to have a clear picture of the entire process at the outset and a support team they can trust.

Authorisation process

Before engaging with the regulator on a new application it is important to do some groundwork. This includes reviewing the proposed business model, the requirements for authorisation and the ongoing requirements for insurance and reinsurance undertakings. Typically, companies will also analyse capital requirements and funding mechanisms at this stage.

The key steps in the Irish authorisation process are as follows:

1. The first step is to contact the CBI’s Insurance Authorisation team and arrange a preliminary meeting to outline your proposal. IDA Ireland can also be a useful partner at this stage.
2. Following this initial meeting, the applicant must prepare the information outlined in the CBI application checklist. The Key Criteria section below gives more details of this.
3. A completed and signed application, together with supporting documentation, is then submitted to the CBI.
4. On receipt of the application, the CBI reviews its contents and will let the applicant know if there are any missing details or additional information required.
5. The CBI then reviews the application. Following this review, the CBI may ask for additional information or clarifications. In our experience this is an interactive process with phases of questioning and clarifications. For indicated timelines, please see the Expected Timeline section below.
6. Once the review is complete, the CBI submits the application to its Authorisations Committee for a decision. Assuming the applicant is successful, the committee then issues an ‘authorisation in principle’ letter. This means that the application has been fully examined, reviewed, and approved in principle by the CBI. It is worth noting that receiving authorisation in principle does not entitle the applicant to start writing business.
7. The applicant then finalises its preparations, such as introducing capital, appointing directors and confirming it is in a position to comply with all relevant regulations, within 21 days of receipt of the authorisation in principle.
8. The final step is the receipt from the CBI of the Certificate of Authorisation.

Once the Certificate of Authorisation has been received, the entity can then start writing business in Ireland, subject to any ‘undertakings’ specified particular to the application.

If the applicant wishes to establish a branch or operate on a freedom of services basis in another territory, the relevant regulatory bodies must be notified. This may lead to further queries from the other regulators. Depending on the model selected (e.g., whether establishing a branch or operating on a freedom to provide services basis) this notification/authorisation could take between one and five months.

Expected timeline

The CBI’s voluntary service standard for processing applications is three months from the receipt of what it deems to be a complete application. Its statutory timeline is six months. The timeline will depend on:

• Quality and complexity of application
• Time taken by the applicant to respond to comments/feedback and quality of those responses
• Time taken by any relevant third parties to respond to queries
• Any changes made by the applicant during the authorisation process

The CBI discloses its average processing times for insurance authorisations in its Authorisations and Gatekeeping report as 34 days in 2024 and 56 days in 2023 (from the date of a complete application to authorisation in principle, excluding special purpose vehicles, or SPVs). Average days from receipt of an incomplete application to issuing a certification of authorisation were 272 in 2024 and 206 in 2023 (excluding SPVs, which experience quicker timelines).

It is worth bearing in mind that these timelines do not include the time required to compile the full application prior to submission, which, depending on the complexity, could take a number of months.

Further details and information on the documentation required as part of the application for authorisation are set out in the relevant checklists produced by the CBI and are available on the CBI’s website. The checklists vary slightly depending on the type of business that the proposed entity will write. Applicants are expected to expand on the information required according to the specific nature of the proposed business.

While the authorisation process will differ from one jurisdiction to another, the above steps will be quite typical of the authorisation process in most territories.

How Milliman can help

Establishing a new entity is a complex process that needs the correct blend of technical expertise, local market knowledge and a track record of working with the regulator. Milliman brings all of these attributes to every project we undertake.

Expertise and experience: Startups and licence applications

We have unrivalled experience of licence applications for greenfield startups as well as with the associated work required to make the new insurer operational.

As actuarial advisers we are particularly experienced in the preparation of business plans, capital assessments and the financial projections required. We also have day-to-day experience of local regulatory and actuarial topics and we discharge statutory roles across Europe.

We are accustomed to working with all the major legal firms and tax advisers to successfully deliver results for our clients. We also work with local third-party administrators and insurance administration outsourcers.

We can help entities to transfer any existing portfolios of business, with Milliman acting as the Independent Actuary if appropriate.

Ongoing support

We provide support through the entire application process but are also available beyond this initial establishment phase.

For example, most of the companies we have helped establish in Ireland have then retained our services on an ongoing basis. Our service offerings can be tailored to your needs and can change over time as your business matures. Our consultants offer services including providing a full outsourced actuarial team, discharging statutory roles, acting as a trusted adviser, supporting in-house teams or working on ad hoc projects as required.

For more information, get in touch with your usual Milliman contact or one of the people listed below.

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¹ 15% for companies that are part of a group with a global annual turnover exceeding €750m.