Administrators note lack of an actuary at Quinn Insurance
Published 06/05/2011 | 05:00
THE administrators of Quinn Insurance yesterday drew attention to the lack of an in-house actuary at the company for many years and accused the previous management of running the company in an "unsophisticated'' way.
It has also emerged that Quinn Insurance is profitable so far this year, with pre-tax profits of €14m for the first three months.
Administrators Grant Thornton yesterday highlighted through their legal team a number of issues regarding how the company had been run before it took control in March 2010.
Barrister Bernard Dunleavy told the High Court: "The company didn't have an in-house actuarial function."
He added that Quinn did not use a model for pricing that was common in virtually all insurance companies of its size.
The pricing of Quinn's motor book was "far less sophisticated'' than that used by insurers of its size, he told the court.
Mr Dunleavy added that Grant Thornton had to import its own risk models when it began its administration and that it used a linear model which is common in virtually all insurers.
The comments from the administrators come after criticism of their role by Sean Quinn and his family.
They have demanded a public inquiry into how the administrators have handled their stewardship of the company.
Meanwhile, it is understood that the Australian bank Macquarie will shortly submit a "substantial'' bill for its work in selling Quinn Insurance on behalf of Grant Thornton.
The bill is expected to come to several million euro and the High Court is set to have a "peer review'' undertaken of these fees, as well as of those charged by Grant Thornton. The latter which run at €500,000 a month.
This is believed to include some payments given to actuaries who have studied Quinn's books.
The judge handling the administration wants to hear from representatives of the State's Insurance Compensation Fund (ICF) before he decides whether to allow the Quinn Insurance group draw on that fund.
High Court president Mr Justice Nicholas Kearns said it was important that the courts were satisfied any bills were incurred properly and that the fees were in keeping with the difficult economic climate that everyone was enduring.