Insurer’s British dealings a concern for some time

THE stability of the British operations of Quinn Insurance has been a cause for concern amongst industry players for some time.

Tue, 13 Apr, 2010 - 01:00

Geoff Percival

According to the Financial Times, a number of London-based insurance companies have voiced concerns to the British regulator – the Financial Services Authority (FSA) – “over a number of years” that Quinn Insurance (UK) was “unsustainable” as no insurer could remain viable when charging premium rates often significantly lower than its rivals, over an extended period.

While an FSA spokesperson refused to comment on whether it received any complaints, they said that in matters where it couldn’t fully regulate non-British owned companies, such as liquidity issues, it does pass on concerns to the regulator in the company’s home market.

However, it is understood that the Financial Regulator here was fully aware of the industry unrest in Britain and agreed with much of the concerns raised by companies there, when it instructed – earlier this month – that Quinn Insurance should cease renewing policies and taking on new business in its loss-making British operations.

Paul McCann and Michael McAteer of chartered accountants Grant Thornton were appointed provisional administrators to Quinn Insurance two weeks ago after an application made to the High Court by the Financial Regulator. While the decision whether or not to confirm their status was adjourned for one week in the High Court, yesterday, they presented the Court with their first report of findings into the financial strength of Quinn Insurance.

The provisional administrators are also due to issue the Financial Regulator with their proposals for the future of the Quinn Insurance business in Britain.

Whether or not the complaints from Quinn’s British-based rivals were based on competitive fear, it is known that in late 2008 when Quinn Insurance was hit with a record fine of €3.25m over its granting of a €288m loan to a related company it was anticipated amongst those in the Irish insurance market that the firm was heading into administration then.