Life Great West purchase of Irish Life

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Bedlam

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No need for the Competition Authority to rule on this sale I suppose?

One has to wonder if these were normal times would this sale have been allowed to proceed.

The combined entity will now market (sell) products for the following

Allied Irish Banks
Permanent TSB
Ulster Bank
Danske Bank

All of the above being tied agents of Irish Life.

And in addition sell through the Broker Market.

One is left to wonder!

Bedlam
 
More on this from yesterdays Independent

THE takeover of Irish Life by Great-West Lifeco could be scuppered on competition grounds because the new, enlarged entity would have a 40pc share of the life and pensions market, an expert has warned.
There is concern that the new company would have such a stranglehold that there would be a radical reduction in consumer choice.
A combination of Irish Life and Canada Life, the Irish operation of Great-West Lifeco, would have a new business market share which is double the nearest rival, New Ireland.
Irish Life has one million customers, while Canada Life has 150,000.
However, Irish Life also has a link with AIB where it sells insurance and pensions through Ark Life from more than 200 branches.
It is estimated that Irish Life will generate around €600m a year in premiums alone from its ArkLife sales through AIB branches.
Insurance expert Tony Gilhawley of actuarial consultancy Technical Guidance worked out that only three life companies will control 75pc of the new life and pensions business after the merger.
The merged entity is to retain the Irish Life name, with the other two main players set to be made up of Bank of Ireland's New Ireland and Zurich.
"The takeover of Irish Life by Canada Life's parent will further concentrate the life assurance market into a smaller number of players," Mr Gilhawley said in a report on the market.
The takeover will mean the market will become so concentrated that Irish Life, New Ireland, Zurich and Aviva
would control 85pc of the market. He said this could mean competition authorities might be forced to block the deal.
Mr Gilhawley said the enlarged Irish Life would have a 50pc share of the term assurance, or life insurance market, based on 2010 data from the central bank, the latest available on the life market.
The enlarged insurer will have a dominant 40pc-plus share of the single premium investment market, he added.
Bank of Ireland distributes pensions and life assurance products from New Ireland through its 254 branches.
The actuary said all bank branches, apart from Bank of Ireland, would be tied to Irish Life after the takeover.
A spokesman for Irish Life denied it would end up with a 40pc market share and insisted its share would be 33pc.
He said the market was set for more consolidation as premium income had collapsed.



 
Irish Life always sold through the broker market, there is nothing new there. In relation to selling through banks, each time Irish Life would have gone through a tendering process to obtain the rights to sell through those entities.

I personally dont see any issue here. If a person wants independent financial advice on life assurance, pension or investment products then they should contact a reputable independent insurance broker as no bank selling only one companies products can give the level of advice that an independent broker dealing with numerous companies can. In many cases Irish Life's competitors will offer cheaper prices so customers should shop around to get the best value. Just because Irish Life has the rights to sell through some banks, it does not automatically follow that the banks customers will take out a policy with Irish Life. Numerous journalists have written about the benefits of not accepting the first price a bank gives you, there is often value to be had elsewhere.

All this shows is that the value of talking to a reputable independent insurance broker has never been more important.
 
Canada Life and its dust gathering portfolio really won't be missed by many here. Great West thinks global and acts local hence Irish Life brand remains but in the end with fewer players you'll actually create consumer confusion.
 
Canada Life does not have a dust gathering portfolio. While they may not be interested particularly in the life protection market as often their premium rates are the highest, they do offer decent pension products that are suitable for some clients. Great West however realises that Canada Life's market share is small and they want a bigger presence in Ireland to benefit from when Ireland recovers. They are getting Irish Life at a comparitively fair price with a large market share and I believe that it will prove to be a good investment for Great West in time.

There will be a little customer confusion but that happens with any rebranding.

Less players in the market is always unfortunate but the Irish market is a small market and consolidation in bad times is always preferable to multi nationals simply deciding to shut their doors.
 
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in the life protection market as often their premium rates are the highest

Not that they were not interested in the life market Steve rather they priced their product to ensure they were strong enough in the future to pay claims in future years. Which seems to me like an example of that typical Canadian financial system trait that is the envy of the world. They will have made a decent killing with the acquisition of Irish Life.

I can't see them keeping their broker consultants though. The number of broker consultants that service Canada Life's 5% is totally out of sync with what Irish Life are achieving with their present consultants.

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There will be a little customer confusion but that happens with any rebranding

Rebranding is but a tiny contributor and to the intermediary, consumer confusion softens the effects of a decline in choice.
 
Bedlam said:
No need for the Competition Authority to rule on this sale I suppose?

One has to wonder if these were normal times would this sale have been allowed to proceed.

The combined entity will now market (sell) products for the following

Allied Irish Banks
Permanent TSB
Ulster Bank
Danske Bank

All of the above being tied agents of Irish Life.

And in addition sell through the Broker Market.

One is left to wonder!

Bedlam
Click to expand...

I agree. In normal circumstances the competition authority should be wary of any mergers creating an entity with half the market.

The mitigating circumstances here are:
1. Canada Life only incrementally increase Irish Life's share, and
2. This puts us in a much better position from where we were headed a few years ago - the state dominating 70% of the market
 
The model of broker consultants will change as time goes on. The advent of online techology for proposal submission, policy enquiry and fund values has diminished the role of the broker consultant to the newer breed of insurance broker.

While there will always be an element of personal relationships/service quality swinging a sale when all things are equal in terms of recommendation to a client, I see fewer reasons for broker consultants to be out on the road when they can do so much more for a broker from a desk in head office.

Should Great West decide to shift the priority of broker consultants from relationship management into more problem resolution functions, this can only be better for insurance brokers and ultimately for the customers in the long run. Many insurance brokers may disagree with me, but I would much rather know that my broker consultant is at a desk available to take my call with a computer in front of them than off somewhere in a car with their voicemail on.
 
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