The Co Armagh-born insurance chief has travelled a long way from a house with no running water to a multi-million earner
Ted Kelly, the chairman of US insurance group Liberty Mutual, and Co Armagh-born, has come a long way from a house with no running water to an annual pay packet of $50m (€38m).
Until it bought a majority shareholding in Quinn Insurance for just €1 last year, few people in this country had ever heard of Liberty Mutual. Based in Boston, it is the third-largest insurer in the US. In 2010 Liberty's revenues amounted to $33.2bn and at the end of that year it had $112bn in consolidated assets.
As its name suggests, Liberty is a mutual, ie, it is owned by its policyholders rather than by shareholders. While it doesn't have to publish details of executive pay, 'The Boston Globe' unearthed details of Dr Kelly's salary from regulatory returns filed in its home state of Massachusetts.
These show that Dr Kelly, currently the chairman of Liberty Mutual and its chief executive until his retirement in June 2011, had been paid a total of $150m between 2008 and 2010 -- an average of $50m a year or almost $1m a week.
Nice work if you can get it.
Liberty's association with Ireland has its roots in 2010 when the Financial Regulator Matthew Elderfield put administrators into Quinn Insurance after it emerged that insurance company assets had been pledged as security for loans taken out by its parent, the Quinn Group.
With Liberty's previous history of acquiring financially distressed assets -- it has bought businesses out of bankruptcy in Venezuela and California -- Quinn Insurance was a natural target.
Dr Kelly quickly made it clear that Liberty was a potential buyer for Quinn Insurance. It helped that, apart from an offshore operation in the IFSC, Liberty had no existing business in either Britain or Ireland.
With feelings already running high in the Cavan-Fermanagh border region, where at its peak Quinn Insurance, had employed almost 2,500 people, a Liberty takeover also had the huge attraction of keeping job losses beyond the 900 already announced by the administrators to a minimum.
Within weeks Dr Kelly was meeting Mr Elderfield to impress upon him Liberty Mutual's suitability as a buyer for Quinn Insurance.
Not that Dr Kelly is a soft touch. Far from it. While never denying his Irish heritage, he hasn't exactly played it up either. Before the Quinn takeover he visited Ireland at most once a year with a couple of friends to play golf. Shillelagh and shamrocks he most certainly is not.
This guy is as hard as nails. In November 2010 it emerged that Dr Kelly, who was still Liberty Mutual chief executive, had issued a directive to the company's loss adjusters to either deny or delay major workmen's compensation claims. The proportion of such claims being denied by Liberty Mutual reputedly doubled within months of Dr Kelly issuing the directive.
In his defence Dr Kelly pointed out that most of the workmen's compensation business being written by American insurance companies was already unprofitable and that it had the potential to become a "time-bomb" if inflation rates increased.
In December 2011 a federal judge approved a settlement between AIG and a number of other insurers including Liberty Mutual, under which they agreed to pay $450m to settle claims that they had deliberately under-reported workmen's compensation premiums to state regulators throughout the 1980s and 1990s. The settlement had been opposed by Liberty Mutual.
Dr Kelly was born in the Co Armagh village of Keady almost 66 years ago. He graduated from Queens University Belfast before going on study at the Massachusetts Institute of Technology, graduating with a PhD in mathematics. He then became an academic, teaching at the University of New Brunswick in Canada and the University of Missouri in the US before becoming an actuary with US insurance company Aetna.
He joined Liberty Mutual in 1992, serving first as president and chief operating officer before becoming chief executive in 1998 and chairman in 2000. Since he first joined Liberty the company's revenues have more than quadrupled from $8bn in 1992 to almost $34bn today.
Dr Kelly attributes Liberty Mutual's success over the past two decades to its patience.
"We are patient. We are realistic. We are not going to say things like we're going to double the business by next year, you grind it out in this business", he told the Irish Independent last year.
However, Dr Kelly's leadership of Liberty Mutual has not been entirely one of uninterrupted upward progress. In April 2008 it agreed to pay $6.2bn for rival US insurance company Safeco. Coming just five months before the collapse of Wall Street investment bank Lehman Brothers the timing could hardly have been worse.
In May 2009 Liberty Mutual reported a 92pc fall in first quarter net income (after-tax profits) to just $28m following a $373m write-down of private equity investments
Under the deal which saw Liberty Mutual acquire Quinn Insurance, Liberty purchased an initial 51pc stake with Anglo Irish Bank, to which the Quinn Group owed €2.8bn, retaining a 49pc shareholding. Liberty will have the option of buying the Anglo shareholding in Quinn Insurance, which has since been renamed Liberty Insurance, at some point in the future.
Liberty bought Quinn's Irish insurance business. It did not, at least for the present, buy its loss-making UK insurance business. Quinn's health insurance business, Quinn Healthcare, was also not included in the deal and this business has since been sold to its management in a deal backed by giant Swiss re-insurer Swiss Re.
While Dr Kelly handed over the day-to-day running of Liberty Mutual to David Long last year, he remains chairman. Since taking control of the former Quinn Insurance last November Liberty Mutual has moved quickly to distance its new Irish subsidiary from its controversial past.
The company has been renamed and is currently engaged in an expensive rebranding exercise, which is clearly designed to put as much distance between Liberty Insurance and Quinn Insurance as possible.
With Irish insurance customers having previously taken the conversion of Church & General into Allianz and Hibernian into Aviva in their stride, Liberty Insurance shouldn't have much trouble putting its sometimes colourful history behind it.
While the rebranding may not present too many difficulties, the dreadful state of the Irish economy may prove to be a far more formidable obstacle. When times are tough people scrimp on cover and are more likely to make claims.
According to figures compiled by the Irish Insurance Federation, non-life insurance premiums peaked at €3.84bn as long ago as 2005 and had fallen by over 16pc to €3.12bn by 2009, the last year for which full figures are available. Given the travails of the Irish economy since 2009 it seems a reasonable assumption that premiums have kept on falling over the past three years.
With the old Quinn Insurance having concentrated on the price-sensitive end of the market it will have been hit at least as hard by the economic downturn as any of its competitors. The newly rebranded Liberty Insurance will have to devise ways of poaching more affluent customers from its rivals. In order to do so Liberty Insurance will, to use Dr Kelly's words, have to "grind it out".