The company, owned by Cavan-based billionaire Sean Quinn, benefited from strong gains on its investment portfolio for the rise in profits.
Although premium income was ahead by 25%, or €98m, the continued high cost of settling claims meant profits from underwriting fell by €4m to €84m.
The drop was more than made up for by stock market gains on its investments, which results in a rise in profits to €49m from €35m.
Quinn Direct said motor insurance premiums have fallen by more than half over the past six years but there has not been a similar drop in the cost settling claims and the company warned that if this continues the company’s profit margins will come under pressure.
To combat this, the company is investing in the British market and into mainland Europe. It already offers commercial insurance in the Netherlands and Belgium and plans to enter the German market later this year.
“Despite the competitiveness of the insurance market we have continued to increase our market share in Ireland and the UK and are making good progress in our European business,” Quinn Direct general manager Colin Morgan said.
The company said it wrote €15m in premiums at its new healthcare arm, acquired from BUPA in February this year, and was confident was the long-term prospects for its investment in the private healthcare sector.
But Mr Morgan added: “We are very disappointed with the lack of Government action in addressing the State-supported dominant and anti-competitive position of the VHI in the Irish market.”