The UK market is waiting for a message from Ireland
As we enter the second week of the Quinn Insurance debacle, its chief executive Colin Morgan is even more noticeable by his absence. The Quinn Group has been sending out various statements attempting to put pressure on the Irish regulator as it heads towards the next high court showdown regarding its administration next Monday. The group desperately wants the ban on Quinn being able to write UK business to ‘end as a matter of urgency’. But you can’t help thinking that the damage has already been done. Bland statements may provide some balance to the thousands of words in articles crafted across the Irish media, but here in the UK, it’s either Colin Morgan or a personal assurance from Sean Quinn that the insurance market wants and clients really need to hear. And even then, the subsequent conversations are going to be a little bit tricky to say the least.
It was Morgan who fronted up Insurance Times last year after Quinn had been taking a beating in the headlines for months following boardroom reshuffles, fines from the regulator and leaked letters to brokers. This morning also, the Financial Times reported what the market has been whispering for months: that rival insurers have been in the FSA’s ear complaining about Quinn’s controversial pricing and claims management strategy for some time. As one senior market source described it: “If something doesn’t look right and smell right, it’s probably not going to taste right either. So it’s probably better to stay away.” It’s just many brokers didn’t. They saw cheap business and the accompanying happy client faces, and then ultimately a quick buck. There’s an argument that some brokers may find more than just egg on their face and could face the wrath of negligence claims depending on how things pan out in the medium term with their clients. But more immediately, Quinn Insurance is fighting for its life, and during this key time Colin Morgan has been missing. The unofficial word is that he is busy ‘dealing with the administration’ which is perfectly believable. But whilst he’s doing that and not sending messages to the market, which has been in a state of frenzy since the first provisional administration announcement, investment banks and consultants have been busy trying to construct deals and punt the Quinn renewals business around the market on behalf of the administrator.
Silence is golden
To be fair to Morgan, should you read the back story there is a little more to all this than he could perhaps make a statement on personally. And perhaps the strategy is to stay quiet for a certain period and until the legal status of the business is resolved. The crux of Quinn Insurance’s survival in the UK appears to depend on its solvency and reserving equations in relation to the investments and deals the Quinn parent Group has constructed with the Anglo Irish bank. And this in turn tracks back to safeguards and a complex financial deal with Quinn Group bondholders. The seven day grace period the High Court granted today to Quinn will give the group more time to produce a restructuring plan and significant management board restructure should the regulator want and need it. The devil will, of course, be in the detail of what eventually and actually emerges from the mini inquest next week. But after that, either way, we really do need to hear news from Colin Morgan.