Third of workforce to lose their jobs

OVER a third of the employees at Quinn Insurance are to lose their jobs as the company’s joint administrators have confirmed they are seeking 900 voluntary redundancies at the troubled insurance firm.

Fears over the future of some of the remaining 1,500 jobs in Quinn Insurance also increased yesterday after the firm’s founder, Sean Quinn, confirmed that the Quinn board had decided to sell the company.

Mr Quinn said he and his family were “devastated” at news of the job losses.

The controversial businessman said the board had reluctantly decided to sell the insurance firm he founded 14 years ago in order to protect the business and maintain the maximum number of jobs.

The 900 redundancies sought by the administrators represent 37% of the 2,450-strong workforce at Quinn Insurance.

The redundancies will be phased in over a 12-month period, although 350 are being sought by the start of July.

The redundancies will see cuts in staff at all eight of Quinn Insurance’s locations – Cavan, Blanchardstown, Enniskillen, Derrylin, Co Fermanagh; Navan, Co Meath; O’Connell St, Dublin; Manchester and London.

The biggest job losses will occur in Blanchardstown, Cavan and Enniskillen.

All staff will be offered a basic redundancy package of four weeks’ pay per year of service on top of normal statutory entitlements. However, employees must indicate their interest by May 19.

Quinn’s joint administrators, Paul McCann and Michael McAteer of Grant Thornton, met staff at the company’s HQ in Cavan yesterday afternoon to announce details of the job losses.

It was also confirmed that the administrators would look at the sale of Quinn Insurance over the next few months. It is understood over 40 Irish and international businesses have declared their interesting in buying the company.

Mr McAteer said they “deeply regretted” the need to restructure the firm but said the redundancies were necessary to secure the long-term future of the remaining jobs.

The administrators had “no alternative” as they aimed to achieve €30 million in savings.

“We have to resize the business to cater for the level of business which we are currently writing,” he said.

The accountant said Quinn would not try and resume any of its loss-making commercial insurance interests in Britain and Northern Ireland.

The company recorded an underwriting loss of €52m in these markets last year.

However, Mr McAteer offered a slight glimmer of hope to Quinn staff as he indicated the full 900 redundancies might not be necessary if the public continued to support the company. “It is important to stress that our customers, both current and new, will have a direct impact on the employment levels within the business,” said Mr McAteer.

He pointed out that renewals in its motor insurance market were running at over 90% since Quinn was placed in administration and 70% in its commercial business.

Mr McAteer declined to comment on past management of the insurance firm.

Staff are also hoping that the administrators might consider the option of jobsharing in order to further minimise the scale of the job losses. Members of the Employee Representative Committee are to hold further talks with the administrators on Tuesday at which the issue of jobsharing is expected to be raised.

There is also growing concern that the proposed sale of the company could result in further job losses.

In a statement last night, Quinn employees said they strongly believed the scale of the redundancies was “unnecessary”.

They again repeated criticism of the Financial Regulator’s decision last month to place the company in administration and impose a ban on its ability to write or renew all business in Britain and Northern Ireland.

The Quinn workers said the administrators’ own recommendation to lift the ban on large parts of the UK business had proved their point.

They accused the regulator, Matthew Elderfield, of “suffocating” Quinn insurance by drip-feeding permission to reopen its business in Britain and the North. Constrains placed on prices charged to British insurers, which have risen by 10%-50%, had made many of Quinn’s products “unmarketable”.

Quinn staff called on Mr Elderfield to immediately allow the insurer to reopen these markets fully without any pricing restrictions.

They also criticised the Government over its “deafening silence” on the issue.