Loss of €790m fails to reflect true state of Quinn, say administrators
A REPORT released today shows Quinn Insurance lost almost €790m last year, but the insurer's administrators last night insisted the figures were "subject to change" and did not reflect the true state of the business.
The massive losses are revealed in the Financial Regulator's insurance statistical review and come as efforts to find a new owner for Quinn Insurance Limited (QIL) intensify.
The bulk of 2009's losses stemmed from a €677m "extraordinary" charge. Michael McAteer, one of two Grant Thornton examiners assigned to QIL, last night said that the charge related "exclusively" to the controversial inter-group guarantees that pushed QIL into administration.
"Because of the guarantees we could not include those assets in the regulatory return, but those assets are not gone," Mr McAteer stressed. "If we were doing returns for the Companies' Office those assets would still be there."
Mr McAteer and QIL private lines and marketing director John McDonagh insisted the insurer was performing "robustly" and would soon push through premium increases in the UK and the Republic.
QIL has already put through a 10pc increase in the UK on August 31 -- the two last night confirmed plans for another "10 to 15pc" hike over the next two weeks.
In Ireland, QIL has come under fire from competitors for failing to increase premiums since the administrators took control of the company on April 1. Mr McAteer yesterday said that rates had been increased in some areas and reduced in others.
"It's not all about premium, it's about the quality of the business," he said, adding that all business written in the Republic since April 1 was profitable at the core underwriting level.
Mr McDonagh said premiums had been "stagnant" in the Irish market in recent months, despite commentary from other insurers around increasing premiums.
"We expect to see that cycle turn and premiums going up over the next three months," he added.
Asked whether QIL would increase its Irish premiums in the same timeline, he replied: "Yes is the answer, because we want to be profitable," though Mr McAteer stressed that rises weren't "imminent".
Last year's QIL figures included losses of €127m on an underwriting level, including €86m for the largely defunct UK book and €41m for the Republic. Mr McDonagh said the Irish figure included €15m for the newly introduced health insurance levy and €15m for the record freeze.
The business had been at "break-even" on an underwriting basis for its six months in administration, Mr McAteer said, as profitable new policies were offset by more challenging policies that were issued in 2009.
"We're exceeding all the targets in our business plan," added Mr McDonagh. "Our retention is above plan, sales are performing reasonably well and cancellation numbers are well below plan."
As many as 20 parties are believed to be mulling over a detailed sales prospectus of the QIL business as investment bank Macquarie hunts down a buyer on behalf of the administrators.
Mr McAteer insisted that the latest figures would "absolutely not" impact negatively on the efforts to sell QIL, adding that bidders would have already gotten the numbers in the prospectus.