The app, which monitors driving style, is available in conjunction with AIG's car insurance cover.
AIG says it aims to reward better driving behaviour with potential savings of up to 25% on car insurance premiums.
AIG hopes it will encourage drivers to improve their driving, leading to fewer accidents on the road.
Customers who use the app will be given a 5% discount on their premium immediately and further discounts of up to 20% will be applied to the premium after three months' use, subject to the scores achieved.
AIG says XLNTdriver is the first driving app on the market with an auto start/stop functionality, which means that users do not have to stop and start the app each time they wish to make a journey.
The app scores the user's driving on a scale of 0-100 and provides the user with a visual representation of their journey together with an overall score.
The app monitors driving performance under four key areas: smooth driving, mobile phone usage, speed and time.
Users will also be able to report an accident 24/7 from their app directly to AIG's Express Claims Team via the 'call now' button feature.
Commenting on the launch of the app, Aidan Connaughton, Consumer Lines Director at AIG in Ireland, said: "The aim of AIG XLNTdriver is not only to reward good driving, but also to make drivers aware of their driving behaviours and encourage better and safer driving."
AIG XLNTdriver is available to download for free at the iTunes or Google Store, to car insurance customers, subject to certain qualifying criteria.