Major UK insurers expected to distance themselves from sale, Quinn insists it is ‘trading robustly’
Quinn Insurance suffered a fresh setback after being banned from re-entering commercial lines, as all the major UK insurers looked set to shun bidding for the stricken insurer.
Insurance Times understands that RSA, Aviva, AXA and Allianz are all very unlikely to bid before tomorrow’s (17 September) deadline set by Macquarie Bank.
Last week, Quinn reported losses of almost €790m (£660m) in 2009. Accounts showed a €677m loss for inter-group guarantees, and operating losses of €86m for the UK and €41m for the Republic.
An industry source said: “Who is going to plug a hole that size? On top of that, it is a relatively small market in Ireland.”
One insurance executive said he “didn’t have a barge pole big enough” to distance himself, while another suggested that buying Quinn could worsen an insurer’s image among brokers.
The sale process has not been helped by the Central Bank and Irish Financial Regulator’s decision to bar Quinn’s re-entry into UK commercial lines, on grounds of capital inadequacy.
Quinn slammed the decision, saying in a statement that it has “no issue with liquidity” and is “trading robustly”. Furthermore, UK commercial was the most profitable before being shut down, the statement said.
Market commentators believe a foreign insurer looking to gain a foothold in the UK and Irish market is the most likely candidate to buy the company. American insurer Liberty Mutual is one of the front-runners for the Cavan-based business.
Anglo Irish Bank is owed €3bn by Quinn Group, and is thought to be keen on putting together a joint proposal with another insurer.
Up to 32 companies have been sent the information memorandum outlining the bid requirements, including private equity firms.
The industry source estimated that Quinn had around £200m premium income in the UK motor market, specialising in young drivers and provisional licences.
The extent of claims coming through from previous years remains unclear, especially as Quinn was only allowed back into UK motor earlier this year if it pushed up rates around 20%.
A Quinn spokesman said: “Administrators were appointed to Quinn Insurance Ltd (QIL) in March 2010, the company has introduced significant price rises into the UK market, and is satisfied that the company on a month-to-month basis is now trading profitably.”