AIB Life, the banking group’s new life and pensions joint venture with Canada’s Great-West Lifeco, has officially launched, with the partners’ investing a total of €250 million to get it off the ground.
The figure is greater than the €180 million the venture was expected to require when it was first announced two years ago.
The launch of AIB Life “marks another key milestone in the delivery of AIB’s strategy to become a full provider of financial services for our circa 3.2 million customers”, said the bank’s chief executive, Colin Hunt.
“We are delighted to have formed a strong strategic alliance that marries the product and service expertise of Great-West Lifeco with AIB’s market-leading customer franchise, technology and distribution so that we can better support our customers in planning their financial lives.”
AIB Life is creating 100 new jobs in customer service, technology, finance, compliance, risk and actuary at its Central Park office in Leopardstown, Dublin 18, and in Letterkenny, Co Donegal, and expects to grow further over the next three years. AIB and Great West Lifeco, which owns Irish Life, are each contributing about 15 staff, though most of their original roles in the respective companies are being backfilled.
Customers can avail of advice and support from AIB’s existing network of 120 financial advisers nationwide, the joint venture partners said. Once the customers have been suitably advised, they gain access to the new AIB Life hub via the AIB mobile banking app.
AIB Life is led by chief executive, Bryan O’Connor, who has worked with AIB since 1990, while Tom Foley, a chartered accountant and former senior banker, is its chairman.
AIB, under Mr Hunt, decided in late 2020 to get back into the life and pensions business, eight years after it put its former Ark Life unit into wind-down at the height of the financial crisis and became a tied agent for Irish Life products.
Irish Life bought Ark Life from London-based Phoenix Group for €230 million in cash in November 2021. Ark Life changed its legal name late last year to Irish Life Arc Dublin.
[ AIB Life joint venture appoints Bryan O’Connor as chief executiveOpens in new window ]
AIB had been receiving about €20 million in commissions a year from its tied-agent arrangement with Irish Life. The new venture is expected to generate “multiples” of that amount for AIB within years, sources previously said.
It is believed, however, that the bank only expects AIB life to contribute to group earnings over the medium term.
Declan Bolger, head of Great-West Lifeco’s operations in Ireland and chief executive of Irish Life, said the venture “represents another step in growing and diversifying our business in Ireland, helping customers to plan for and secure their financial futures”.
Other deals carried out by AIB in recent years include its repurchase of Goodbody Stockbrokers in 2021, a decade after it sold the firm, and agreements to buy a total of about €9.5 billion of corporate and tracker mortgage loans from Ulster Bank, as the latter exits the Irish market.
