Saturday 3 December 2016

State 'not involved' in firm's life insurance deal with AIB

Published 03/02/2012 | 05:00

FINANCE Minister Michael Noonan has insisted the Government had no involvement in state-owned Irish Life's successful tender for a massive life insurance deal with state-owned AIB.

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The comments come a month after Irish Life was unveiled as the new partner for AIB's Ark Life business, having fought off competition from incumbent Aviva and Swiss insurance giant Zurich.

The Ark Life deal will give Irish Life up to €600m in extra premium income a year, something that will increase the market share of Ireland's biggest life insurer by about 5pc.

Mr Noonan said he had "no role to play in the decision" since it was a "commercial" matter for AIB.

Economic

"As it is a commercial matter for the bank, any future negotiations/agreements conducted by the bank will presumably be concluded in a manner which derives the best economic return for the bank and, by inference, the State," he added.

The deal done so far gives Irish Life the right to write all of Ark Life's new business, but does not obligate the plc to take on any of the 300 employees who worked on Ark Life at Aviva.

Irish Life is understood to be in talks with AIB about taking on the 'back book' -- or old business -- of Ark Life. If this happens, some of the 300 staff are expected to transfer to Irish Life, with the remainder reassigned to AIB.

Mr Noonan this week said AIB and Aviva "were working closely to agree the separation process and, following that, employees currently supporting the Ark Life business within the joint venture will transfer to AIB or another agreed provider".

He declined to comment directly on whether there was any threat to the 300 jobs, but said that was a "matter for the board of AIB".

Mr Noonan was responding to written questions from TDs.

Irish Independent

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