Ireland’s most controversial insurer has been brought to a standstill, as brokers and insurers alike say ‘we told you so’. But what will this mean for the market?
Brokers were in talks with clients and insurers this week following the revelation that Quinn Insurance has gone into provisional administration and is banned from writing new business in the UK.
Rival insurers immediately started talking to brokers that had placed business with Quinn, which had sizeable books in indemnity, construction and fleet, in addition to its direct motor arm, Quinn Direct.
Aviva corporate partnerships director Janice Deakin said: “My teams will be out there talking to the brokers – we want to see how we can help brokers and their clients.”
Brokers with large Quinn accounts are believed to include Kerry London and Giles, suggested to be in the region of £5m and £8m respectively – though both brokers were unavailable for comment.
Brokers that had steered clear of Quinn because of its shaky reputation also saw the development as an opportunity. Towergate is openly targeting clients of brokers that had placed business with Quinn. Chief executive Andy Homer said: “We have never supported Quinn. Good brokers will now be calling on their competitors, asking if they need help.”
Bluefin chief executive Stuart Reid said: “Two years ago, we took the decision to wind down the account because we were concerned about their stability and the way they did things. Although there may be minor exceptions, we should have absolutely no business at all with Quinn.”
Lockton Risk Solutions’ executive chairman, Neil Nimmo, said: “Lockton is already in negotiations with a few high-quality insurers to find alternative solutions for those firms that have been caught up in this financial crisis.”
Quinn was a particularly big player in solicitors’ professional indemnity. Last year, it wrote £23.7m worth of business, roughly around 10% of the market, making it the fifth-largest insurer in that space.
Brokers handing Quinn professional indemnity insurance for their solicitor clients will not need to rebroke the policies.
The Solicitors Regulation Authority currently has faith that Quinn will continue to pay out on claims until October, when the renewals begin. There had been fears that the SRA would ask brokers to remarket the policies because of Quinn’s insolvency. A spokesman said the situation could change depending on updated information. “The
SRA understands that existing policyholders of Quinn in the UK will continue to be covered, and that customers of the firm can continue to make claims in the normal way. We are seeking confirmation of this.
“In the meantime, we are advising firms to take no action at present. We will contact all policyholders direct if the situation changes, and we will put information on our website.”
There is widespread optimism that the news would push up prices.
One broker who worked with the insurer said: “Like a lot of brokers, we have been issuing warning letters about [Quinn] to new business and renewals, saying ‘on your own head be it – but if you really want it cheap then take your chances’.
“Looking slightly more long term, with that cheap market closed, will it allow insurers to increase rates? Liability and fleet are the main two where Quinn has been historically cheap. Trades like contractors such as scaffolders and roofers, we might be able to get premiums up.”
Quinn: what now?
Quinn Insurance remained tight-lipped this week, issuing only a brief statement in which it attempted to reassure brokers and policyholders. It said the Irish financial regulator’s action was the result of “a perceived depreciation of underlying assets”.
In fact, the Irish regulator said that the insurer would continue to operate in its home company – but crucially, under new management. In a statement, it said: “The financial regulator has an onsite presence in the firm to oversee its actions and to work with the new management.” It has, however, banned Quinn from writing new business in the UK – because it was losing money in the country.