AIB to announce Irish Life partnership

AIB is expected to announce Irish Life as its new third-party life assurance and pensions provider next week, after ending its current partnership with Aviva.

It was announced yesterday that AIB is to end its five-year arrangement with Aviva, which saw the bank sell Aviva products through its branches, after deciding not to renew the current contract. The move will also see the 300 Aviva employees, who worked on the Ark Life joint venture, temporarily switch to AIB until a new distribution deal is announced.

While it is believed AIB is close to naming Irish Life as its new partner, a spokesperson for AIB declined to comment, other than to say the bank hopes to unveil a new partnership in the next week or so.

AIB is also set to buy out Aviva’s 75% stake in Ark Life, with the price for that estimated at around €100 million.

The bank did say, however, that existing Ark Life customers’ policy terms and conditions won’t be impacted by the change and that it will continue to offer customers the full suite of life and pensions products, through Aviva, until a new deal is finalised.

Meanwhile, the 300 employees remain Aviva staff and will become the responsibility of the new distribution partner, once AIB signs its new deal. Those jobs are understood to be safe for the time being.

Despite this, the Unite trade union — which is currently negotiating with Aviva over wider-reaching restructuring and redundancy packages within that group — yesterday called for a meeting with AIB’s management over the move.

“Staff have had a torrid time over the past six months and are currently living under the threat of major job losses. Today’s decision will add to the uncertainty, and we want to be clear on whether elements of the knowledge and experience built up in the life insurance service for AIB, over the years, will be transferred with the contract,” said Unite’s regional officer, Brian Gallagher, yesterday.

Sean Egan, chief executive of Aviva Ireland, noted that the company’s existing distribution agreement with AIB, relating to its motor and health insurance offerings, will remain in place.

Regarding the loss of the life and pensions partnership, Mr Egan added: “It is disappointing that, after months of negotiations, we were unable to reach commercial terms which we could both agree upon. However, we announced in October a clear strategy to be the undisputed market-leading general, life and health insurer in Ireland and that remains our goal. We specifically want to strengthen our position in the life and pensions market. We are ideally positioned to do this by making full use of our global scale and capabilities.”

It is understood that the Ark Life business was worth between €500m and €600m a year to Aviva, roughly half of its total life and pensions business.