Regulator shoots down Quinn's bid to re-enter UK market
THE Financial Regulator has shot down Quinn Insurance's bid to re-enter the brutally competitive UK commercial insurance market.
Massive losses prompted the regulator to ban Quinn Insurance Limited (QIL) from writing any new UK business when the insurer slipped into administration back in April.
The ban on UK personal lines was soon eased with QIL allowed to write new motor insurance books at premium levels agreed with the regulator.
Over the last few months, QIL's administrators have been engaged in a battle to convince the regulator to lift the ban on doing mainstream UK business.
But yesterday the regulator announced that, having carried out a "detailed review" of the administrators' proposals, the ban on new commercial business would remain in force.
In a statement, the regulator last night attributed its decision to the fact that QIL has insufficient capital to support its UK book, which attracted premiums of €445m last year.
"Should the company obtain sufficient capital and return to required solvency levels in the future, consideration will be given to reviewing this decision," the statement added.
A spokeswoman declined to say how much more capital QIL would need for the ban to be lifted, while the insurer's administrators also declined to reveal the capital demand.
Responding to the decision, QIL yesterday stressed that the development would trigger no further job losses.
"The strong underlying performance of other divisions within QIL [means that] those employees working on UK commercial insurance will be redeployed into other areas," QIL said.
The statement added that the UK decision would "not impact" the ongoing process of securing a buyer for QIL.
QIL's administrators are understood to have expected only marginal levels of UK commercial business should the regulator have lifted the ban. The administrators' proposals envisaged price hikes of as much as 2000pc on mainstream commercial business lines.
QIL also made no attempt to resume writing business in the UK solicitors' professional indemnity market, a mainstay of the UK commercial business which was written out of the business plan on foot of horrendous losses.
Despite the QIL statement stressing the limited impact of the regulator's decision, a separate statement from the Quinn Group last night slammed the ban.
Exercising its right as QIL's shareholder, the Quinn Group said it was "very disappointed" by the regulator's decision, insisting the UK commercial business was the "most profitable" QIL line in 2009 and 2010.
The Quinn Group also questioned the regulator's assertion that QIL does not have adequate capital to write new commercial business.