Insurance Ireland (Life & Pensions) Factfile 2013 & 2023

[GSheehy]

Might be interesting to some to see how the main providers of products has changed over the ten years.

Plenty consolidation and no real activity on new entrants.

No growth at all on Single Premium Life Business in that period but interesting to note that the biggest writers of such business have ties with banks.

 

[S class]

Zurich are doing very well in the single premium pension area.
Presumably this is PRSAs.

 

[ClubMan]

interesting to note that the biggest writers of such business have ties with banks.

I presume that this might suggest that some (many?) people take up an invitation from their bank for a "financial review" or otherwise just deal with the divil they know and end up signing up for a pension through them as tied agents? No harm in that if it means that they have some pension cover rather than none, but presumably they're probably not getting the best deal possible on charges and maybe also on asset allocation/lifestyling?

 

[conor_mc]

I’d presume it’s because many financial advisors are also mortgage brokers and know which side their bread is buttered on!

 

[GSheehy]

Is more PRSA business being placed with ZL that the others? Probably. But the Single Premium Pension figures above would included lump-sums to RACs, PRBs, ARFs, Master Trusts and Annuities also.

Yes, on the teeing up of bank customers who have more than €40,000 in an account for some special treatment on advice from the in-house tied agent on investing their deposit/current account money in an investment bond, with very high charges (probably circa 1.5%), in a managed/multi-asset fund for 5 years. My point was specific to single premium life business though, as it's lower hanging fruit for the bank to enrich the management & shareholders.

 

[ClubMan]

My point was specific to single premium life business though, as it's lower hanging fruit for the bank to enrich the management & shareholders.

Ah, yes, I was focused on the pension aspect rather than the non-pension general investment aspect.

 

[Fortune]

What happened to Caledonian Life?

I think Ark Life ended up with Irish Life, but they were passed around a bit so it's hard to remember where they finished up.

 

[LDFerguson]

What happened to Caledonian Life?

Now Royal London.

I think Ark Life ended up with Irish Life, but they were passed around a bit so it's hard to remember where they finished up.

Hard to keep track of AIB's life & pensions operations. Saol is a joint venture between AIB and Great-West (who own Irish Life). https://www.saolassurance.ie/company/about-us/index.html

 

[AJAM]

Is Single Premium Life Business - Is that Life Insurance, Mortgage protection, Accident Illness, that sort of stuff
Or is that Exit tax investments?

 

[Fortune]

Single Premium Life Business -

It's non-pension business where only one premium is paid at the commencement of the policy. It could be any of those types you mention, but most likely to be an investment subject to exit tax.

 

[AJAM]

but most likely to be an investment subject to exit tax

No wonder it's not growing! Everybody loses with Exit tax.

 

[ClubMan]

Everybody loses with Exit tax.

I don't like the deemed disposal/exit tax regime, but this is simply incorrect. No gain (or a loss), no tax. If there is a gain then tax is deducted and the investor benefits from the net growth. And the exchequer also benefits from the tax. In the gain scenario everybody doesn't lose - quite the opposite.

 

[AJAM]

I'm not sure we want to go down the Exit tax rabbit hole again. It's been done to death on other posts.
But

No gain (or a loss), no tax

Not true. You get taxed on unrealized gains, which are not real gains. You also can get taxed on a loss. If you hold 2 ET funds and 1 makes a gain and the other makes a larger loss, you make a loss, but you still pay tax on the gain.

If there is a gain then tax is deducted and the investor benefits from the net growth

You lose the massive benefit of compounding your gain. I've shown before that the 8 year DD costs the investor >50K and gives the taxman an extra 2K of tax vs the normal CGT regime.

And the exchequer also benefits from the tax.

I can't directly prove it, but it is my strong belief that the exchequer would collect more tax if they scrapped exit tax, because a) more people would invest and b) their investment outcomes would be so much better. One example of this is shown directly above, there is no growth in LEAT funds. Meanwhile there has been huge increases in CGT receipts.

 

[Fortune]

No gain (or a loss), no tax

Don't forget the 1% premium levy

 

[GSheehy]

As this post refers to insurance company unit liked investment products, why not keep it on topic for once and just discuss Life Assurance Exit Tax (and its workings) and not add to confusion but including references to self-assessed EFT Exit Tax.

 

[AJAM]

For someone who doesn't have a good working knowledge around investments and/or tax, I think these LEAT products are the best choice....as long as the fees are low and they have access to index trackers.

Do we know what the fees on these products are? I've an old Quinn Life one that charges ~1% which could be better.

 

[GSheehy]

I've an old Quinn Life one that charges ~1% which could be better.

Are you sure it's not (now) 0.5% as I've a recollection of them promising to reduce the 1% to 0.5% after 10 (?) years. You'd see it on your account where value/units are added back.

Do we know what the fees on these products are?

For single premiums, as far as I'm aware, anything from 0.65% (execution only with cost of Levy covered) to circa 1.5% (with advice). Latter would be with a bank but I think the average for the advice product is 1.20/1.25%.

 

[ClubMan]

Are you sure it's not (now) 0.5% as I've a recollection of them promising to reduce the 1% to 0.5% after 10 (?) years. You'd see it on your account where value/units are added back.

15 years?

Did the 15 year old Quinn Life freeway funds (now Irish Life) get the .5% AMC loyalty reduction

Hi, Quinn life Freeway funds were a very popular option on askaboutmoney some 15 or more years ago for simply and cheaply tracking stock market indexes, especially for small recurring investments. They promised a .5% reduction in charges on funds after 15 years. Had anyone seen this promise...

www.askaboutmoney.com

I've an old Quinn Life one that charges ~1% which could be better.

Original headline AMCs are listed here. Subtract 0.5% if your investment is 15+ years old.

Did the 15 year old Quinn Life freeway funds (now Irish Life) get the .5% AMC loyalty reduction

Hi, Quinn life Freeway funds were a very popular option on askaboutmoney some 15 or more years ago for simply and cheaply tracking stock market indexes, especially for small recurring investments. They promised a .5% reduction in charges on funds after 15 years. Had anyone seen this promise...

www.askaboutmoney.com

 

[GSheehy]

Not true. You get taxed on unrealized gains, which are not real gains. You also can get taxed on a loss. If you hold 2 ET funds and 1 makes a gain and the other makes a larger loss, you make a loss, but you still pay tax on the gain.

Just on this, in relation to the LAET regime:

• If there's tax deducted on a chargable event, based on a certain value, and that value subsequently falls then tax is added back to the policy, if it's still in force, and the provider manages that for you,
• If you held (say) Index tracking TopTech100 ETF, Indexed Global Equity ETF, Medium Duration Corporate Bond and Gold ETC within the one product then losses/gains on values are offset against each other. Again, all handled within the fund by the provider.

The best explainer that I.m aware of on LAET is attached