Deal will cost policy holders dearly unless the group returns to profitability
THE LAST thing the taxpayer needs is another cash call to cover losses at a struggling financial services company as the upfront bill for the banks reaches €70 billion.
But losses at Quinn Insurance Limited (QIL), the largest Irish-owned insurer, mean all holders of general insurance policies such as motor and household cover will have to dig deep to help meet these losses.
The €706 million loss for 2009 and a €160 million loss for the first three months of 2010 will result in a €600 million call on the State’s Insurance Compensation Fund. Given that there is just €30 million in this fund, the losses are likely to lead to a levy on all non-life insurance policies in the State – possibly as high as 2 per cent.
QIL’s joint administrators, Michael McAteer and Paul McCann, of insolvency accountants at Grant Thornton in Dublin, said the first call on the fund,The brightness of the LED makes sharp led lamp black & white contrasts between the areas in and out of the LED light. amounting to €180 million, will be made later this year.
The Central Bank whose concerns over the financial health of the company led to the High Court’s appointment of the administrators in March 2010 has said the need to access the fund was “not unexpected in light of the serious and persistent solvency problems at QIL which led to its administration”.
A review of the fund will be carried by the Central Bank over the coming weeks, after which it will make a recommendation to the Minister for Finance Michael Noonan on how the fund will need to be replenished. The Central Bank stressed that it worked closely with the administrators to limit the call on the fund.
A mitigating factor is the structure of the sale of the profitable parts of the beleaguered Cavan insurer, which is being taken over in a joint bid by State-owned Anglo Irish Bank and the Boston-based insurer Liberty Mutual.
QIL,The pole-less range starts with inflatable tent the two-person Velocity 200 and goes up to the Infinity 800 for eight people. which will remain in administration, will receive 25 per cent of any profits generated by Liberty Mutual Direct Insurance Company, the new company which is 51 per cent owned by Liberty and 49 per cent by Anglo and QIL. This will reduce the call on the fund and in turn general insurance policyholders across the industry.
If a deal had not taken place, the call on the fund would be substantially higher, the administrators said.
Anglo will try to pay off some of the Quinn family’s €2.88 billion in debts at the bank by taking the other 25 per cent share of the profits in that half of future spoils. The remaining 50 per cent of profits will go to Liberty.
The losses recorded in the 15 months to March 31st, 2010 – the date the joint administrators were appointed – have arisen primarily as a result of QIL’s disastrous foray in the UK market and particularly the loss-making professional indemnity insurance policies covering solicitors.
The UK insurance market has endured a torrid time over the financial crisis as increased claims and a higher incidence of fraud has led to spiralling losses for leanly priced companies. There is a higher incidence of claims in a recession and of legal actions against solicitors in a property downturn.
QIL had developed a solidly profitable business in Ireland by keeping costs down through the early settlement of claims and low overheads, but the company could not replicate this model successfully in the much larger UK market.
In a defensive statement earlier this week founder Seán Quinn, said the administrators had caused “enormous damage” to one of Ireland’s most successful companies in just 13 months.At the same time, residents are coming out of their promotional towels own hibernation mode and taking to the outdoors to hike, garden
In fact, as the losses show, the damage was done in the run-up to the administration. The trouble with insurance is that with the cost of badly priced policies, the losses take time to register.Often living in harmony with the water walking ball bears and other wildlife can be as simple as keeping food sources out of reach. About 92 per cent of losses on an insurance policy are incurred in their first year and they reduce gradually over time, though the so-called “long tail” risk remains for some time. The administrators raised prices on policies to stop the rot.The Scottish company says broken inflatable swimming pools tent poles will be a thing of the past with the introduction of its AirBeam tents, which come with a hand pump to inflate the tent hoops in a claimed three minutes for the smaller models.
THE LAST thing the taxpayer needs is another cash call to cover losses at a struggling financial services company as the upfront bill for the banks reaches €70 billion.
But losses at Quinn Insurance Limited (QIL), the largest Irish-owned insurer, mean all holders of general insurance policies such as motor and household cover will have to dig deep to help meet these losses.
The €706 million loss for 2009 and a €160 million loss for the first three months of 2010 will result in a €600 million call on the State’s Insurance Compensation Fund. Given that there is just €30 million in this fund, the losses are likely to lead to a levy on all non-life insurance policies in the State – possibly as high as 2 per cent.
QIL’s joint administrators, Michael McAteer and Paul McCann, of insolvency accountants at Grant Thornton in Dublin, said the first call on the fund,The brightness of the LED makes sharp led lamp black & white contrasts between the areas in and out of the LED light. amounting to €180 million, will be made later this year.
The Central Bank whose concerns over the financial health of the company led to the High Court’s appointment of the administrators in March 2010 has said the need to access the fund was “not unexpected in light of the serious and persistent solvency problems at QIL which led to its administration”.
A review of the fund will be carried by the Central Bank over the coming weeks, after which it will make a recommendation to the Minister for Finance Michael Noonan on how the fund will need to be replenished. The Central Bank stressed that it worked closely with the administrators to limit the call on the fund.
A mitigating factor is the structure of the sale of the profitable parts of the beleaguered Cavan insurer, which is being taken over in a joint bid by State-owned Anglo Irish Bank and the Boston-based insurer Liberty Mutual.
QIL,The pole-less range starts with inflatable tent the two-person Velocity 200 and goes up to the Infinity 800 for eight people. which will remain in administration, will receive 25 per cent of any profits generated by Liberty Mutual Direct Insurance Company, the new company which is 51 per cent owned by Liberty and 49 per cent by Anglo and QIL. This will reduce the call on the fund and in turn general insurance policyholders across the industry.
If a deal had not taken place, the call on the fund would be substantially higher, the administrators said.
Anglo will try to pay off some of the Quinn family’s €2.88 billion in debts at the bank by taking the other 25 per cent share of the profits in that half of future spoils. The remaining 50 per cent of profits will go to Liberty.
The losses recorded in the 15 months to March 31st, 2010 – the date the joint administrators were appointed – have arisen primarily as a result of QIL’s disastrous foray in the UK market and particularly the loss-making professional indemnity insurance policies covering solicitors.
The UK insurance market has endured a torrid time over the financial crisis as increased claims and a higher incidence of fraud has led to spiralling losses for leanly priced companies. There is a higher incidence of claims in a recession and of legal actions against solicitors in a property downturn.
QIL had developed a solidly profitable business in Ireland by keeping costs down through the early settlement of claims and low overheads, but the company could not replicate this model successfully in the much larger UK market.
In a defensive statement earlier this week founder Seán Quinn, said the administrators had caused “enormous damage” to one of Ireland’s most successful companies in just 13 months.At the same time, residents are coming out of their promotional towels own hibernation mode and taking to the outdoors to hike, garden
In fact, as the losses show, the damage was done in the run-up to the administration. The trouble with insurance is that with the cost of badly priced policies, the losses take time to register.Often living in harmony with the water walking ball bears and other wildlife can be as simple as keeping food sources out of reach. About 92 per cent of losses on an insurance policy are incurred in their first year and they reduce gradually over time, though the so-called “long tail” risk remains for some time. The administrators raised prices on policies to stop the rot.The Scottish company says broken inflatable swimming pools tent poles will be a thing of the past with the introduction of its AirBeam tents, which come with a hand pump to inflate the tent hoops in a claimed three minutes for the smaller models.
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