Allied Irish Banks (AIB) has reached an agreement with Canada Life Irish Holdings, a subsidiary of Great-West Lifeco, to form a joint venture.
The shareholding will be split 50/50 between the two companies.
AIB intends to use the JV to offer a range of life protection, pensions, savings and investment options enhanced by integrated digital solutions.
It chose Canada Life as it already has experience in the bancassurance sector through Irish Life Assurance, another subsidiary of Great-West Lifeco, and because the bank already has a tied agency distribution agreement with Irish Life.
AIB expects the JV to “deliver a meaningful financial contribution in the medium to long-term” and anticipates its equity investment to be around €90m (£77m, $107m). This will cover the set-up costs and regulatory capital required.
‘Strong strategic alliance’
Colin Hunt, chief executive of AIB, said: “This announcement marks another key milestone in the delivery of AIB’s strategy to enhance and diversify our revenue, to become a full provider of financial services for our customers and to build long-term, sustainable profits for our shareholders.
“This deal moves AIB beyond a distributor model to create a strong strategic alliance that marries the product and services expertise of Great-West Lifeco with AIB’s market-leading customer franchise, technology and distribution. It will allow our customers to plan their finances and investments and puts us at the heart of our customers’ financial lives.’’
Declan Bolger, head of Great-West Lifeco’s operations in Ireland, added: “We are delighted to be deepening our strategic partnership with AIB through the establishment of this new joint venture company.
“It is an excellent strategic fit for Great-West Lifeco and aligns with our long-term plans for diversified growth in the Irish market. We are excited by the opportunity to create a new venture serving the needs of AIB’s customers and leveraging the strengths of our group to provide innovative life, pension and investment solutions.”
