(8)The undertakings concerned have a combined aggregate world-wide turnover of more than EUR 5 000 million [Great-West Lifeco (including Irish Life): EUR […], Aviva Health: EUR […], GloHealth: EUR […]]. Two of the undertakings concerned have an EU-wide turnover in excess of EUR 250 million [Great-West Lifeco: EUR […], Aviva Health: EUR […]]. Aviva Health and GloHealth achieve more than two thirds of their turnover in Ireland, but Great-West Lifeco does not. The notified operation therefore has an EU dimension.

(7)Therefore, the Proposed Concentration consisting in the acquisition by Irish Life of the entire issued share capital of Aviva Health and sole control of GloHealth constitutes a single concentration for the purposes of Article 3 of the Merger Regulation.

(6)The Proposed Concentration will be implemented by means of two Share Purchase Agreements ("SPAs") entered into by Irish Life on the same day, 9 March 2016. […] On this basis, it can be concluded that the two transactions are inter-related and unitary in nature.

(5)Aviva Health is active in the provision of health insurance products to both consumer and business customers in Ireland.

(4)GloHealth is active in the provision of health insurance products to both consumer and business customers in Ireland. Irish Life currently holds a 49.3% stake in GloHealth and controls the company jointly with the founders and managers of GloHealth.

(2)Great-West Lifeco is an international financial services holding company with interests in life insurance, health insurance, retirement and investment services, asset management, and reinsurance businesses in Canada, the United States, Europe and Asia. Great-West Lifeco is part of the Power Corporation of Canada.

(1)On 28 April 2016, the European Commission received notification of a proposed concentration pursuant to Article 4 of the Merger Regulation by which the undertaking Irish Life Group Limited (“Irish Life”, Ireland), a wholly owned indirect subsidiary of Great-West Lifeco Inc. (“Great-West Lifeco”, Canada), acquires within the meaning of Article 3(1)(b) of the Merger Regulation sole control of the whole of the undertakings GloHealth Financial Services Limited (“GloHealth”, Ireland) and Aviva Health Insurance Ireland Limited (“Aviva Health”, Ireland) by way of purchase of shares. Irish Life, GloHealth and Aviva Health are designated hereinafter as the “Parties”.

Subject:Case M.8010 – IRISH LIFE / AVIVA HEALTH / GLOHEALTH Commission decision pursuant to Article 6(1)(b) of Council Regulation No 139/2004 and Article 57 of the Agreement on the European Economic Area

4.COMPETITIVE ASSESSMENT

(9)The activities of GloHealth and Aviva Health overlap in the market for provision of health insurance to consumer and business customers in Ireland. Irish Life active in health insurance only through GloHealth. The transaction gives rise to a possible affected market for the provision of health insurance to consumer and business customers in Ireland, if market shares are measured by customer numbers ([20-30]%).

4.1.Relevant product market

(10)In previous decisions relating to the insurance sector, the Commission has distinguished between three large categories of insurance product markets: life insurance, non-life insurance and reinsurance. The Commission has also identified product markets for insurance distribution and insurance underwriting, which are ancillary to the provision of insurance.

(11)Regarding non-life insurance products, the Commission has generally considered a distinction between the following segments: (i) accident and sickness; (ii) motor vehicle; (iii) property; (iv) marine, aviation and transport ("MAT"); (v) liability; (vi) credit and suretyship; and (vii) travel.

(12)Both accident and sickness insurance as referred to in previous Commission decisions, and health insurance as described in the present transaction, fit within the same classification under the EU Non-Life Insurances Directives, namely: “Classes I and II (accident and sickness)”. The Parties submit that the Irish health insurance market presents distinct characteristics because it is subject to a specific regulatory framework (which is governed by the Health Insurance Act) that applies in addition to the regulatory framework for Classes I and II.

(13)The Central Bank of Ireland is responsible for the approval of non-life insurance companies in Ireland. In order to carry out the business of health insurance in Ireland, under Health Insurance Act it is also necessary for insurers to be registered with the Health Insurance Authority (“HIA”), a statutory regulator of the private health insurance market in Ireland. Furthermore, at the level of the trade association of insurers, Insurance Ireland, there is a specific council for health insurance companies that comprises the CEOs of all four private health insurance companies operating in the domestic Irish market.

(14)The existence of regulatory obligations that influence health insurance product design implies that the making and marketing of health insurance products is a specialised activity from a supply side perspective.

(15)From a demand side perspective, no other insurance product is an effective substitute for health insurance because the latter provides a distinct type of insurance cover.

(16)Accordingly, health insurance does not compete with other types of non-life insurance in Ireland because it is not substitutable from a demand or supply side perspective.

(17)Taking into account all of the above, it seems reasonable to treat, for the purpose of this case, health insurance market in Ireland as a distinct market. This type of insurance covers products whose principal purpose is to provide cover for the actual cost of medical services including, but not limited to, the following:

a.Inpatient treatments received in public hospitals, voluntary hospitals, private hospitals and private treatment centres in Ireland.

b.Treatments received outside of Ireland, either in the case of an accident or emergency or in situations where the customer has been referred overseas on an elective basis.

c.Outpatient / non-hospital / day-to-day treatments received in public, voluntary and private hospitals and private treatment centres, including general practitioner services and physiotherapy services.

(18)According to the Parties, certain health-related products offered by insurers, such as: (i) insurance products sometimes known as “critical illness policies” that offer cash payments on the occurrence of specified illnesses or accidents (e.g. “cancer cover” or “personal accident” cover), and (ii) services offered to manage the risks associated with people being unable to work due to ill health (e.g. “medical case management services”), fall outside the definition of a “health insurance contract” as described in the Health Insurance Act. These products do not provide indemnity cover in respect of actual charges for medical services, often they are not offered as stand-alone products and, as they are not interchangeable with health insurance, it is not unusual for individuals to hold both types of products simultaneously.

(19)The question whether certain health-related products should be included in the market for health insurance, can be left open for the purpose of this case as the transaction does not give rise to competition concerns under any plausible market definition.



(20)The Parties submit that it would be inappropriate to further segment the health insurance market by customer type (i.e. consumer versus corporate), as supply-side substitutability exists: (i) the same competitor set offers services to all customer types, and (ii) insurers rely on the same resources (e.g. IT systems and personnel) in order to service all customer types. The Parties further explain that the market conditions in Ireland are such that a differentiation by customer type is not relevant: first, the regulatory regime means that every health insurance product is available for purchase by any customer (consumer or corporate), regardless of whether that product was designed for or targeted at a particular customer type; second, there is no example of an Irish health insurance provider that has attempted to specialise in servicing either consumer or corporate customers alone (notwithstanding the regulatory restrictions on doing so); third, the HIA’s detailed market analyses have not recognised separate product markets for consumer and corporate customers.

(21)Taking into account all of the above, it seems reasonable to consider, for the purpose of this case, that health insurance market in Ireland should not be further segmented by customer type.

(22)The Parties further submit that Restricted Membership Undertakings (“RMUs”), which offer health insurance to their employees only and account for 4% of the market, are part of the health insurance market as the Parties face competition from RMUs for customers who are qualified to purchase their health insurance products. For example, an employee of the national police force is a potential customer of GloHealth / Aviva Health and of a RMU such that there is competition in the market for this business.

(23)Although the employees of RMUs can choose from both types of insurers, this is not valid for all categories of customers. Customers not employed by RMUs do not have access to the services offered by these. As a consequence, the RMUs and the products they offer do not pose a competitive constraint to the Parties across the health insurance market. For the purpose of this case, RMUs will not be considered as part of the health insurance market.