The controversial Irish insurer is yet again in the firing line
By now you will have heard that Quinn Insurance has been placed into provisional administration by the Irish regulator and is closed to new business in the UK. In a statement that has sparked more questions than answers, the reasons cited point to poor solvency ratios, unexplained “matters” that have “very recently come to light”, and a new management team.
The market’s jungle drums have been beating hard about the state of the controversial Irish insurer for some time. Its competitors and some savvy brokers have long complained about its pricing strategy and aggressive approach to settling and paying claims early. It comes against a backdrop of coded health warnings from trade associations and its rivals, as well as Quinn’s high-profile withdrawal from the rating environment.
Then there has been the chatter surrounding the insurer’s parent group. Led by Sean Quinn, a property magnate and the richest man in Ireland, the family has seldom been out of the headlines. Over the past two years, the group has been fined millions by the Irish regulator, enacted boardroom reshuffles and is reported to have lost €1bn in an investment deal that ended in a busted flush with the Anglo Irish Bank.
Despite all this noise and back story, however, Colin Morgan, chief executive of Quinn Insurance, audaciously came out fighting last year to the bemusement of many. He went on a charm offensive in the UK in an attempt to woo, reassure and pacify inquisitive brokers and a baying press pack smelling blood.
But the reality was that its cheap prices were dividing brokers into camps of those who would and those who felt they ought not to trust their clients with Quinn. And there was also at least one rival insurer who, whatever the accuracy of the accusations, privately wouldn’t deal with brokers who placed accounts with Quinn in a bid to send a cold but definite message about the integrity of its relationships.
Today, the brokers who did do business with Quinn are having difficult conversations with their clients, while everybody else is trying to make hay. In an echo of the collapse of Independent Insurance, the market is now asking how this situation was allowed to happen and why an intervention did not come sooner. After all, it was the FSA that passported Quinn in. Whether the issue of long-tail systemic risk is now kicked into the political long grass or not will probably depend on the colour of the next government. But that’s another story. IT