Liberty Insurance committed to Ireland despite 130% jump in pre-tax losses

Liberty Insurance remains committed to the Irish market and intends to compete for new business with attractive premiums despite suffering a 130% increase in pre-tax losses last year.

The company has found the going tough since entering the Irish insurance market in 2011 when it took a 51% stake in Quinn Insurance while a sector-wide deterioration of the claims environment has done little to help.

Higher claims costs helped nudge its 2014 losses up to €27.7m, an increase of 130% on the €12.03m loss it recorded the previous year.

The insurer paid out more than €246m in gross claims last year which represents a near €10m increase on 2013 levels.

Its total claims liability, net of a reinsurance, came in at €198m.

In 2013, it incurred claims of €151.7m.

The company’s losses mounted despite an increase in revenue with its net premium written increasing from €167.9m to €213.4m.

Income from each of its motor, property and liability segments increased in 2014.

Earlier this year, Liberty announced large-scale layoffs as a result of losses incurred by its UK business.

The layoffs saw 270 jobs lost in Dublin, Cavan and Fermanagh as the company withdrew from the UK personal motor insurance market. Liberty’s UK market was serviced by employees based in Ireland.

According to the company’s annual accounts, an average of 1,040 staff were employed by Liberty in 2014, about 80 fewer than in 2013.

Staff costs remained largely stable at €54.2m.

In the wake of the layoffs which came before the latest accounts were filed with the Companies Registration Office, Liberty chief executive Tom McIlduff said the company would again turn a loss in 2014 and predicted its loss-making streak would extend into this year.

A Liberty spokesperson said yesterday that 2014 was a challenging year for the business, largely due to a deterioration in reserves.

“The company subsequently announced in June 2015, plans to take corrective action in order to strengthen its long-term competitive position in Ireland,” said the spokesperson.

“This included withdrawal from the personal motor insurance market in Great Britain and, to reduce its cost base, a significant restructure of its operations in Ireland. The company also confirmed its commitment to building a successful business in Ireland that aims to offer competitive prices to its existing and prospective customers.

"This position has not changed.”

The directors’ report says its primary objective for this year is to “build on the foundations put in place over the past two years” with a continued focus on improving its underwriting performance which they recognise takes time and is set down in a multi-year plan.

Liberty took full control of Quinn Insurance, founded by former billionaire businessman Sean Quinn, in late 2013 when it bought the remaining share of the business from IBRC.