Sale could secure Quinn family loan repayments of £2.3bn

US insurer Liberty Mutual is in talks with Anglo Irish Bank about buying Quinn’s insurance business.

Anglo hopes a deal with Liberty Mutual will allay the Irish government and Financial Regulator’s concerns about the bank’s ability to fund and manage a takeover of Quinn Insurance, as well as secure repayment of €2.8bn (£2.3bn) in loans from the Quinn family.

Under any such deal, Anglo would temporarily share ownership with the US insurer, which would ultimately take outright ownership of Quinn. Both Anglo and Liberty have expressed an interest in Quinn, but declined to comment on any joint discussions.

As reported in Insurance Times last week, the insurer’s administrator, Grant Thornton, is hoping to sell Quinn’s healthcare unit in order to boost the sale of its insurance arm. Quinn Insurance provides all the underwriting, or core insurance functions, to Quinn Healthcare, which acts as a brokerage and sales network.

A senior insurance source told Insurance Times that the healthcare arm could add another €20m onto the price tag. Brokerages typically make profit margins of 30%, implying €10m annual profits at the health business. “If you paid twice earnings, you'd get to €20m,” said the source.