Qatar giant enters the Irish car insurance market
The Qatar Insurance Company is to enter the Irish motor insurance market in a major development for the embattled sector, the Irish Independent has learned.
It's understood that the Middle East heavyweight will provide millions of euros in capital to a new venture that's been established by Chill Insurance owners Padraig and Seamus Lynch.
And the Irish Independent also understands that the new venture has lured former Axa executive Seamus Merity to head up the business.
It's believed that the Chill Insurance owners have been plotting the new motor insurance venture for the past 12 months.
It's likely to receive regulatory approval within a matter of weeks, and will probably start selling into the market by the end of September.
The new company will act as a managing general agent, generating fees and a slice of profits from the sale of the Qatar firm's products here.
The new business is majority-owned by Seamus and Padraig Lynch, with its management team - which is completely separate to that of Chill Insurance - also owning a stake.
It's understood that the new company's motor insurance product will initially be sold through the Chill Insurance website. Chill already acts as a broker for a number of insurance companies.
The Qatar Insurance Company - which has an 'A' credit rating with Standard & Poor's - has been increasingly targeting the motor insurance sector in Europe, and already has a presence in a number of countries including the UK.
Listed on the Qatar stock market, the company has a market capitalisation of about €4.5bn. Last year, it wrote gross premiums of 8.3bn Qatar riyals (€2bn), and generated a net profit of 1.04bn riyals (€256m).
The company is entering the Irish motor insurance market as customers experience huge increases in their premiums. Insurers have been correcting their pricing to reflect the high cost of claims here.
That's seen motor insurance premiums soar by as much as 50pc over the past year. They're likely to rise by another 10pc to 15pc.
Insurers are also shouldering the fall-out from the collapse of rivals.
Qatar Insurance Company could use an entity in Malta to passport into Ireland.
Malta-regulated Setanta Insurance failed in 2014, resulting in a huge legal dispute over who should be liable for the cost of 1,700 claims that would cost over €95m to settle.
The Court of Appeal ruled in March that the Motor Insurers' Bureau of Ireland should cover the cost of the claims. But that decision has been appealed to the Supreme Court.
Last week, Gibraltar-based Zenith Insurance said it was quitting the Irish motor insurance market. In July, Gibraltar-based Enterprise Insurance collapsed. It had sold its policies through Wexford-based Wrightway Underwriting.
It's not clear yet what specific customer segment that the Qatar-backed venture will target. However, it's believed that it will not be chasing business by offering big discounts on premiums.