Quinn Insurance recorded deficit of €788m last year

QUINN INSURANCE recorded a deficit of €788.4 million in unaudited accounts for 2009 that have been provided to the Financial Regulator.

This involved a trading loss of €127.5 million on its underwriting activities and exceptional costs of €677.6 million relating to the write down of certain non-core assets held by subsidiaries.

These include a wind farm in Derrylin and certain hotel properties.

Of the trading losses on its underwriting activities, €41 million related to its business in the Republic and €86 million to the UK.

These figures will emerge today from the publication of the Central Bank’s annual statistical review for the insurance sector.

Quinn Insurance’s joint administrators at Grant Thornton yesterday moved to reassure the public about the current financial viability of the company.

They said the 2009 underwriting losses primarily resulted from increased flood claims, the introduction of the Government health levy and an increase in claims provisions in line with market trends.

The increase in asset writedowns was in line with regulatory requirements and take account of potential commitments to third parties of Quinn Insurance subsidiaries.

They added that the company is operating profitably at present and business volumes are strong both here and in the UK.

“On a month-by-month basis we are making money,” joint administrator Michael McAteer told The Irish Times yesterday.

“We have introduced significant price rises in the UK and we’re very confident that the business is profitable.”

After a period of being barred from writing business in the UK following their appointment on March 30th, the administrators have allowed Quinn re-enter the motor market and premium prices have been increased by an average 20 per cent.

“Even with the hardening in prices we’re not seeing a reduction in volumes,” Mr McAteer said.

He said there had been “no significant price change” in the Irish market.

When asked if Quinn Insurance would record a profit for 2010, Mr McAteer said it would be “borderline” due to legacy issues that still have to be washed out of the business.

Mr McAteer confirmed that Quinn Insurance has already paid out in excess of €500 million in customer claims so far in 2010, and continues to process claims as normal.

The joint administrator said Quinn Insurance was “trading above its business plan”.

The stronger-than-expected volumes meant that up to 100 out of a planned 902 voluntary redundancies would not now proceed.

This related mainly to an office in Enniskillen in Northern Ireland.

He said an application to re-enter the commercial market in the United Kingdom was currently being considered by the Financial Regulator.

The costs of the administration process are running at €400,000 a month, Mr McAteer added.