New Ireland Assurance, the Irish subsidiary of French company AXA, may be coming on the market. Among the companies likely to be interested in purchasing it would be Irish Life, according to speculation in the industry.
New Ireland Assurance has denied it is in discussions relating to the disposal of its pensions and life assurance divisions. However, sources believe the French parent may be considering a sale and that a number of companies might be interested.
New Ireland sold off its general insurance arm, Irish National Insurance, to Eagle Star earlier this year. If Irish Life was the purchaser, the acquisition would represent a major increase in its presence in the Irish marketplace.
However, the managing director of New Ireland, Mr Jack Casey, said yesterday that there were no proposals for the sale of the company before the board of Sunlife Provincial, the British company which owns New Ireland. Asked if there had been discussions at local level, Mr Casey said: "We are not talking to anyone at the moment." He added that the company was constantly reviewing its position in relation to the market. A spokesman for Irish Life said: "We have no comment. But if opportunities emerge with any company we would take a very close interest in them."
The company has made no secret of its desire to make acquisitions in order to strengthen its market share. New Ireland is owned by Sunlife Provincial in Britain, which is in turn owned by the French-based AXA, the second-largest insurance company in the world. On Tuesday, the British Department of Trade and Industry gave the go-ahead for a merger of Sunlife with Equity and Law. New Ireland's profits halved last year to £5 million, but business has recovered this year, boosted by the £30 million it received for the Irish National Insurance sale. Irish Life has a French general insurance company, Xaar, which has been making losses. It is anxious to sell Xaar and there has been speculation that it might suit Irish Life and AXA to rationalise their respective operations in France and Ireland.
Brendan McGrath adds: If New Ireland is purchased, it could involve Irish Life - or any other purchaser - paying well over £170 million. However, the likely structure of any deal is not clear, with one possibility being that UAP could take a stake in Irish Life as part of the deal.
New Ireland shares are very tightly held, with SunLife & Provincial holding 83 per cent of the 10.8 million shares. The New Ireland share price has risen dramatically from 950p at the beginning of the year to 1600p at yesterday's close in Dublin, valuing the life assurance group at £172.4 million.
A combination of Irish Life and New Ireland's life assurance and pensions business would create a formidable player in the Irish market.
In the £2 billion life assurance market, Irish Life has 24.8 per cent and New Ireland 7.5 per cent of annual premium business, while in the single premium sector, Irish Life has 23.4 per cent and New Ireland 14 per cent of the single premium business, according to the most recent Irish Insurance Federation statistics.
In the £1 billion savings and protection market, Irish Life has 22.8 per cent and New Ireland 7.2 per cent of annual premiums, while in single premiums, Irish Life has 19.9 per cent and New Ireland 7.1 per cent.
Gross premium income from pensions business last year totalled more than £900 million. Irish Life had 27.7 per cent and New Ireland 7.9 per cent of the annual premium business, while in single premiums, Irish Life had 26.7 per cent and New Ireland 20.7 per cent.
In no sector of the life assurance pensions business would a combination of Irish Life and New Ireland have less than 30 per cent of the market, and in some sectors substantially in excess of 30 per cent. That could be a major factor if any merger of the two businesses was to get the approval of the Competition Authority.
