THE CHIEF executive of Quinn Insurance, the country’s second largest insurer, has said the company lost a “minuscule” number of customers due to concerns about the losses incurred by its owner, Sean Quinn, in Anglo Irish Bank.
Colin Morgan said large corporate customers remained with the insurer, despite the controversy over the Quinn family investment in the now nationalised bank.
“There was a lot of publicity around the Anglo Irish thing. What we had to do and what we always try to do is focus on the business,” said Mr Morgan.
“The amount of business that we have lost out of it is minuscule.
“Conversely, a lot of customers have a huge admiration for Quinn Direct and what we have done in the insurance market. We are an Irish company, we are operating in the country – to a lot of our customers, they stuck by us.”
Quinn Group, owner of Quinn Insurance, wrote off €829 million in 2007 as a result of the investment in Anglo Irish and signalled that the group would write off a further €130 million in 2008.
The write-off left the group with a pretax loss of €425 million for 2007. Mr Quinn has said his group will make cash profits of €400 million to €500 million this year.
Mr Morgan said the investment in Anglo Irish had “no direct impact on the financials of Quinn Insurance” and that it “continues to operate at solvency margins”.
He said the company was making underwriting profits.
“We expect to be profitable this year, which will further strengthen our financial position – we are in a comfortable position,” he said.
He said that Quinn Healthcare, the business acquired from Bupa, had increased the number of customers covered by the company by 13,000 – almost 3 per cent – to 502,000 customers this year.
Mr Morgan said that the increasing cost of claims had driven up customer premiums by 10 per cent over the last six to nine months and that he expected premiums to rise by a further five to 10 per cent by the end of the year.
“There would be concern about the trend of increasing claims, both on the increase in frequency and in the cost,” he said. “We are in a recession, and in recessionary times the claims frequency does tend to increase a bit.”
He expects the cost of employer and public liability insurance to rise in the second half of this year.
“We would only increase premiums if claims costs go up and we are keeping a close eye on that,” he said.
Mr Morgan said the company kept prices down by maintaining lower costs through the early settlement of claims, lower employee costs, selling directly to customers and through new technology.
Responding to criticism of the company’s forceful approach to settling claims, he said the company needed to be aggressive in handling claims if it felt that some cases were potentially fraudulent.
“If we are taking premiums off people – and at the end of the day we are paying out claims on their behalf – we need to be aggressive if there is a suspicion around the validity of the claim,” he said.
Quinn Direct has an 11 per cent share of the Irish general insurance market, while Quinn Healthcare controls about 23 per cent of the health insurance market.
