Quinn heads back towards profit after shake-up
Motor cover increases driving revenue up
Quinn Insurance is on the brink of moving back into the black after registering large losses for the past two years when the firm was controlled by the Quinn family and its team of executives.
The UK business has just moved into profit on a week-by-week basis for the first time this year, the administrators Grant Thornton told the Irish Independent this week.
On average, the company's UK motor insurance business has implemented price increases of 25pc, helping the UK business to stage a recovery, even though the volume of business has dropped.
Quinn Insurance lost about €49m in 2008 and is expected to register losses of about €50m for 2009.
However, improving the 2010 performance has been the key objective of the administration team.
This team -- led by Michael McAteer and Paul McCann of Grant Thornton -- are concentrating on getting the business to break even or post a profit on a week-by-week (or run rate) basis.
The problems earlier this year when the company was placed in administration are likely to prevent 2010 being profitable in its entirety, but the administrators are confident losses are now stopping and the changed performance will attract suitors to the company, which is still owned by Sean Quinn and his family.
The company will have to take a €10m charge in 2010 to cover redundancy costs.
Speaking in Cavan, Michael McAteer told the Irish Independent the company hadn't suffered a major drop in business in Ireland since administration, with premium income only down by "single digits'' against the same period last year.
He said there had been little change in pricing, but UK motor prices were up by about 25pc -- "giving less volume, but more revenue".
The UK business lost €44m last year, but it may be possible to get it to break even at least this year, Grant Thornton said.
The company took on the administration in late March and Quinn Insurance was effectively out of the UK market for about eight weeks.
This is going to curb profitability in 2010. The other key factor is that Grant Thornton's investment strategy will be more conservative and therefore investment returns will be lower than a commercial company would expect.
"It is akin to turning a ship, it is a slow process to get it straight, and then once achieved it will move nicely ahead,'' said one source.
The Irish Independent spoke to several of the most senior managers at Quinn Insurance this week and all of them reported few cancellations, although they said writing new business had been more difficult since March.
The firm is now going to up its advertising spending and try to gain a stronger foothold in the Dublin insurance market, which is its area of traditional weakness.