Insurance company Aviva has said it is disappointed at AIB's decision to end its life and pensions distribution joint venture.
Under the agreement, AIB sells life and pension products written by Ark Life, a subsidiary of Aviva Life Holdings Ireland Limited, through its branches in Ireland.
A spokesperson for Aviva said it had worked hard to negotiate a continuation of the agreement.
It is understood that the AIB joint venture accounted for business totalling between €500m and €600m - or half of Aviva's life and pensions business. Informed sources indicated that AIB was likely to select Irish Life to replace Aviva.
Sources said that under the terms of the joint venture contract, AIB will now have to buy out Aviva's interest in the joint venture - which is around 75% owned by Aviva and 25% owned by AIB. They estimated the buyout price at around €100m.
300 Aviva staff who worked in the joint venture are expected to transfer to AIB as a result of the decision. They had already been earmarked for potential outsourcing under Aviva's restructuring announced last year.
That restructuring included shedding 950 jobs - in addition to the 300 targeted for outsourcing - and the closure of its Irish branch network.
The UNITE union said it was seeking an urgent meeting with AIB management following the announcement
AIB said that existing AIB/Ark Life customers' policy terms and conditions will not be affected by this change - and that business will continue through Aviva until a new third party provider is announced shortly.
