Spectacular cost of administration is real scandal
LOCALS in the border counties say the spectacular cost of the Quinn Insurance administration and the demise of the business since it was wrested from the Quinn family are the real scandal at the heart of the Quinn story.
When Quinn Insurance was taken into administration over a year ago it appeared to have surplus assets of €300m, it now has a €600m blackhole that will be paid for by a levy on insurance policies. Premiums have fallen from more than €1bn to less than €700m this year.
"We didn't run it into the ground, but no company ever runs well in administration," said Michael McAteer, one half of the Grant Thornton duo that's running Quinn Insurance.
"Having the words 'under administration' under your name when you're selling insurance is not very sales and marketing friendly."
Mr McAteer said the €600m black hole in Quinn was the result of inadequate cash set aside for insurance policies written before the administrators -- a problem that didn't come to light until actuaries went through the books.
Three teams of actuaries tackled the sums -- their figures for Quinn Insurance's shortfall were an eye-watering €250m apart, raising eyebrows at the Central Bank.
Mr McAteer said the discrepancy arose because the last set of actuaries, EMB, did their report six months later when they had six months of extra data.
During the intervening six months, trends got worse in the UK in particular.
Projections for future claims escalated, and the blackhole deepened. The two other sets of actuaries "came to meet the number" found by EMB, he added. Mr McAteer makes no apology for the €160,000 administration fee levied for the time he and his four-man team spend at the insurer.
"It covers the costs of running the office, professional indemnity insurance, which is not insignificant for taking on a case like this, and support staff," he said.
"I can understand how it sounds, but running an insurer that's going to turn over €650m, €700m this year ain't cheap."