Zurich cautious on interest in BoI's life-cover operations
Published 06/08/2010 | 05:00
SWISS insurance giant Zurich would "certainly be interested in having a look at" Bank of Ireland's life assurance businesses when they come onto the market next year, the group's most senior Irish life assurance executive said yesterday.
Zurich Ireland chief executive Anthony Brennan made the comments as his company revealed a 10pc rise in new business for the first half of 2010, boosting Zurich's market share to 17pc.
Separate figures obtained by the Irish Independent show Bank of Ireland grew its life assurance sales by 12pc in the six months to June, giving the bank a market share of 19pc.
The Richie Boucher-led bank confirmed plans to sell Bank of Ireland Life, New Ireland and Bank of Ireland Asset Management back in April, as the plc slims down its non-core operations.
"There's nothing happening on it [the sale] yet, but we'd certainly be interested in having a look at it," Mr Brennan said yesterday.
"Brokerages have been key to our success and going through a banking channel is something you'd have to think long and hard about -- at the right price, you can look long and hard at anything."
Based on the most recent market share figures, Zurich and Bank of Ireland's combined business would have a 36pc share of the life assurance market, pushing them ahead of market leader Irish Life.
"People would be happy to have two very strong life assurance companies competing against each other," Mr Brennan said, adding that Zurich's global scale meant "raising finance would not be an issue whatsoever".
The life assurance boss stressed, however, that the potential acquisition would have to be a "strategic fit" for Zurich and management would have to be confident the addition wouldn't "distract" from existing operations.
Zurich has been the fastest-growing player in the Irish life market for the past two years, and the Irish management also runs a substantial cross-border business selling into other European countries.
Yesterday's figures showed Zurich sold €94.6m of Irish new life assurance policies in the first six months of the year, using the industry benchmark of Annual Premium Equivalent (APE), excluding investment only.
APE is based on 10pc of the contribution from single-premium policies sold over a given year, plus 100pc of all regular premium policies.
Investment-only business, where insurers invest money for big-ticket pension funds, is excluded from the industry benchmark as the one-off nature of the transaction has the potential to distort trends.
Zurich's core APE figure was 10pc better than its performance in the first half of 2010, while the increase swells to 12pc when investment-only business is added back in.
Mr Brennan said the life insurance market had improved considerably in the first quarter of the year, with high numbers of people retiring and pension funds restructuring.
"The market has slowed a lot [since then]," he said, adding that Zurich would he "happy" if it ended the year 12pc ahead in absolute terms.
Single premium life insurance policies were Zurich's best performer in the first half of the year, with sales up 106pc, while single premium pensions (excluding investment only) were up 79pc. Regular premium pensions continued to fall, shedding 26pc, while regulator premium life insurance sales were up 7pc. Cross-border business, run out of Dublin, recorded sales of €45.7m for the first six months, up €1.9m on a year earlier.