Conventional wisdom has it the Irish life assurance and pensions industry is overpopulated, with too many companies chasing too little business.There might have been some rationalisation in the industry in the past few years with the three Irish bancassurers - Irish Life & Permanent, AIB (Ark Life) and Bank of Ireland (Lifetime and New Ireland) - increasing their presence.
But there are still eight firms with less than 5 per cent market share, with only four companies - the three big bancassurers and Hibernian - having more than 10 per cent of the market.
But now Current Account can reveal that the life and pensions market is going to become more crowded with the imminent introduction of a bancassurance business by Bank of Scotland's Irish arm. It is understood that Bank of Scotland already has a relationship with Scottish Provident in its existing Irish lending business. However, Bank of Scotland seems to be planning a more formalised presence in the life and pensions market with a dedicated bancassurance business, to add to its existing home loans business and its very substantial business banking business after the ICC acquisition.
It is understood that the new bancassurance business will be introduced in a couple of weeks, with recruitment in progress for a number of bancassurance managers in Dublin and Cork.
This is a brave move by Bank of Scotland into a part of the financial services business where competition is cut-throat. But the bank has a solid record in Ireland and a positive image after its arrival in the mortgage market resulted in interest rates on home loans falling sharply.
It is safe to assume that had Bank of Scotland not upset the cosy consensus in the Irish mortgage market three years ago, banks and building societies would still be operating the huge interest margins they enjoyed. If Bank of Scotland is able to have a similar impact in the life and pensions business, then the consumer will be the winner.