If the merger of Irish Life and Irish Permanent goes ahead it could cause some headaches for competitor First Active.

The former building society, now publicly-quoted bank, earns significant commission selling Irish Life products.

But if Irish Life achieves access to the distribution network of Irish Permanent it would no longer need the First Active network.

In any case it would probably be seen as inappropriate for a merged Irish Life-Irish Permanent to use the distribution network of a major competitor.

First Active has said that it wants to increase the income it generates from insurance business.

Perhaps the time has now come to consider the acquisition of a life assurance operation in much the same way that Irish Permanent moved to acquire Prudential (now Irish Progressive), or to make a distribution arrangement with another insurer.

First Active has a wide customer base and a good distribution network. With the necessary expertise it could produce insurance products for its customer base.

But in a competitive market it would need to build scale quickly to compete effectively.