Irish Life health insurance wing loses almost €6m in five months

Parent firm generated C$117m between August and December

 

Irish Life’s new health insurance business made a loss of eight million Canadian dollars (€5.7 million) in its first five months of operation, according to figures from its Canadian parent, Great-West Lifeco.

Irish Life acquired Aviva Health and the 51 per cent of GloHealth that it didn’t own on August 1st. The two businesses have since been merged under the Irish Life Health brand, with a 21 per cent market share.

The figures recently filed by Great-West Lifeco show the health insurer generated revenues of C$117 million between August 1st and the end of December. It also incurred C$13 million in acquisition and restructuring expenses.

Great-West Lifeco took a C$31 million writedown on the goodwill valuation of the acquisitions. This reduced it to C$95 million from C$126 million previously.

The total assets acquired, including goodwill, amounted to C$872 million. This included cash of C$85 million and portfolio investments of C$123 million.

The liabilities assumed amounted to C$715 million. This included C$360 million in insurance contracts and C$318 million for other liabilities.

Irish Life’s 49 per cent stake in GloHealth was valued at C$32million at the time of the transaction, indicating that the founders of the business received just more than C$33 million for their majority shareholding in the company.

One of those founders, Jim Dowdall, has since become managing director of Irish Life Health.

Great-West Lifeco told analysts last week it was on track to deliver €16 million of annual run-rate synergies from the health insurance deals.

Irish Life is the third-ranked player in health insurance behind State-owned VHI and Laya Healthcare, which is owned by US financial group AIG.

Allianz stake

Separately, in an analysts call last week about its earnings, Great-West Lifeco said its gain from the sale of its 30 per cent stake in Irish insurer Allianz would be in the “handful of millions”.

Irish Life is selling the stake to Allianz’s German parent company for €145 million, which is just above the carrying value of its holding in the business.

Irish Life contributed profits of €170 million to its parent, Great-West Lifeco, in 2016, down 16 per cent the previous year, according to last week’s results.

Irish Life’s net earnings for the three months ending on December 31st, 2016, were €61 million compared to €77 million for the same period of the previous year.

Irish Life’s chief executive, David Harney, said that the results reflected a “robust and diverse product portfolio” and said the company was building in key areas, notably through the formation of Irish Life Health.

Irish Life had €78 billion of assets under management at the end of 2016, up 22 per cent on a year earlier.

Irish Life is the biggest life and pensions group in Ireland, with more than one million customers. The company was acquired from the State by Great-West Lifeco in 2013 for €1.3 billion. It was previously part of the listed Irish Life & Permanent group, which was nationalised in 2011 with a €4 billion bailout.