Consumers face €300 premium hike over Quinn losses

HARD-PRESSED consumers face paying up to €300 more a year for their insurance in order to shore up the €600 million black hole in the Quinn Insurance Group.

It is feared a levy of up to 2% may be imposed after the Quinn group yesterday posted losses of €706m for 2009.

Further losses totalling €160m are also forecast for 2010 and relate to business undertaken in Britain just before the appointment of administrators to the company last year.

Last night, the Quinn family said it was “dismayed and saddened at how the value of the company has been utterly undermined over the past 13 months since the appointment of administrators”.

“The Irish taxpayer needs a full explanation as to how we have arrived at this point considering that Quinn Insurance had over €1.1 billion of liquid assets in addition to €464m of property at the end of March 2010,” the family said.

“It is incumbent on the Government to make immediately public all documents relating to the work of the joint administrators and the involvement of Anglo Irish Bank with Liberty Mutual. If this does not happen then the cover-up of the erosion of value at the expense of the Irish taxpayer at Quinn Insurance will never be revealed,” the statement added.

The company administrators have confirmed they have signed a deal to sell Quinn Insurance to US insurance giant Liberty Mutual and Anglo Irish Bank for a total of €200m.

All 1,570 jobs will be retained in the new company, which will be called Liberty Mutual Direct Insurance.

Last night, the Central Bank acknowledged the joint administrators’ call for an estimated €600m from the Insurance Compensation Fund to shore up the losses in the group.

It said the bank is to carry out a review of the financial position of the fund in the coming weeks and will then make a recommendation to the Finance Minister regarding funding.

“Any levy imposed will apply to non-life insurance companies,” the bank said.

The premium levy on general insurance policies for cars and home insurance was increased from 2% to 3% in 2009.

The levy was first introduced in the 1980s to bail out PMPA and ICI, the latter a subsidiary of AIB, which ran into severe difficulties underwriting high-risk ventures in the British market.

The Quinn family owes Anglo a total of €2.88bn and a further €1.3bn is due to other lenders.