Quinn insurance owners confident of growth but warn that prices will rise

THE new owners of Quinn Insurance (QIL) have expressed confidence in the company’s growth prospects, but indicated the firm will no longer be the cheapest player in the Irish market.

Liberty Mutual’s chief executive, Ted Kelly, and president, David Long, held “positive” meetings with Quinn staff this week.

A joint venture of Liberty and Anglo Irish Bank last week formally agreed to take over the Irish assets of QIL.

Liberty will invest €102 million for a 51% stake, with Anglo controlling the remainder in its bid to recover part of the €2.9 billion Quinn debt to the nationalised bank.

Yesterday, Mr Kelly said Liberty was recapitalising a shell of a business left by the failure of QIL, rather than technically buying the insurance group. He said that all money being invested by Liberty would simply recapitalise the business.

He added that the formal takeover of QIL should be completed by September and that the business should be re-branded prior to that.

“We haven’t officially decided on the new name, but it will be re-branded very shortly,” Mr Kelly said.

He added that Liberty is happy with its new asset, but admitted that it “will have to work hard to make this work”.

However, he said Liberty has a strong record in acquiring companies and transforming them from collapse to recovery — having made similar moves in the Far East, mainland Europe and South America.

“We were one of the first parties to express an interest in Quinn Insurance, over a year ago. We see many positives in the business and are optimistic about working with the management and staff on making both the Irish and UK operations a success,” Mr Kelly continued.

While Liberty likes to have local people (all existing Quinn jobs have been saved by this deal) manning its operations in each country where it has a presence, Mr Kelly and Mr Long suggested the Irish operation’s new management team will come from the broad “Liberty family”.

They also hinted that the group may exercise its option to acquire Quinn Insurance’s British business, which is due to remain in administration even after the Irish business is sold.

While Quinn benefited from a reputation as one of the cheapest players in the Irish insurance market, Liberty said they would be practicing “a more sophisticated pricing policy” than both “the prior owner” and the administrators, adding that price would reflect quality.

Mr Kelly added that although the partnership with Anglo was “unusual“, no timeframe for ending the agreement nor price limit for the maximum debt repayment has been agreed.

“The courtship has ended and the marriage has begun, but we haven’t talked about divorce,” he quipped.