Quinn Insurance in administration

Oscar_The_Grouch

shaz77 wrote: »

Hi All

Just to update you, it appears that holes have been discovered in some of the regulators original findings, it is hoped that by Friday the UK wing of the business will be open again.

Errrmmmmm...... No.

For those interested, here is an article in the Insurance Times where Quinn admit that they need somewhere between 100m euro and 150m euro to "restore its solvency position".

Essentially, this means that they think they need 100m euro, but it could be up to 50% more, just to get back to the point where they will make no profits at all. Great company!

In addition to the bailout, they need 550m euro to clear the bondholders.

What you need to remember is that this figure is what Quinn will ADMIT to. Essentially, the "holes" referred to in the post by Shazz appear to be the ones that the insurance industry (and thereby, the general public in increased premiums) will be forced to drop countless millions into caused by the greed and inept management of one firm.

former_student

Oscar_The_Grouch wrote: »

Errrmmmmm...... No.

For those interested, here is an article in the Insurance Times where Quinn admit that they need somewhere between 100m euro and 150m euro to "restore its solvency position".

Essentially, this means that they think they need 100m euro, but it could be up to 50% more, just to get back to the point where they will make no profits at all. Great company!

In addition to the bailout, they need 550m euro to clear the bondholders.

What you need to remember is that this figure is what Quinn will ADMIT to. Essentially, the "holes" referred to in the post by Shazz appear to be the ones that the insurance industry (and thereby, the general public in increased premiums) will be forced to drop countless millions into caused by the greed and inept management of one firm.

This poster is a troll.

Can I also remind you that this is an NI forum.

BigAl94

Not looking good now http://www.businessworld.ie/livenews.htm?a=2582909

36square

Oscar_The_Grouch wrote: »

Essentially, this means that they think they need 100m euro, but it could be up to 50% more, just to get back to the point where they will make no profits at all. Great company!

Do you really understand what this means? I suspect you don't but feel free to surprise me.

BigAl94

Adjourned for one week http://www.businessworld.ie/livenews.htm?a=2582974

former_student

BigAl94 wrote: »

Adjourned for one week http://www.businessworld.ie/livenews.htm?a=2582974

A very good result for Quinns as the hype up until today had been that immediate Administrtation was looming.

I think it is reasonable to conclude at this stage that Quinn will be saved however for them to be profitable they would need their UK market re-opened.

Needhelpsaving

ballyblack wrote: »

they are not taking one any new business in N.ireland & Uk but you are still insured until your policy expires

"The regulator ordered the firm to stop writing new business in the UK, where it specialised in providing motor and professional indemnity insurance. A statement on its website says that anyone with an existing policy with the firm will not be affected and that its policies will remain valid.

“The effect of this action is to prevent Quinn Insurance Limited suffering further financial losses from its currently unprofitable UK business,” the statement said"

Phew, I was about to go into meltdown as we had renewed our home insurance with them last month.

Oscar_The_Grouch

36square wrote: »

Do you really understand what this means? I suspect you don't but feel free to surprise me.

Surprise!!! Yes I do understand what it means. 22 years in the insurance industry tends to give you a bit of an understanding.

Oh!! You want me to explain it to you!! Why didn't you say so? I'll try not to use words that are too long or complicated. Where I do, I'll give you some pointers.

Quinn Insurance is in financial difficulty (they are having money problems, 36square). They have been charging low premiums for a number of years for what the rest of the market considers to be high risk business (they've been a bit silly with their prices, 36square). The rest of the market have been saying this for a number of years and expecting it to come back and bite Quinn in the bottom.

Why is charging a low premium a problem? Despite what people think about insurance companies, they do an awful lot of statistical analysis (looking at numbers, 36square). This is then used to agree the premium levels to charge that will provide them with the following:

Enough money to pay everyones wages & pensions
Enough money to pay everyones claims
Enough money to pay some to shareholders
Enough money to pay for buildings & associated costs
Enough money for IT and infrastructure
Enough money to pay into the various regulatory & industry bodies

Everyone thinks that the lion's share goes to the shareholders, but when you look at the figures, they get about 2% of your premium on a good year where the regulatory bodies (including FSCS, MIB, FSA, etc.) get about 8% in the UK, regardless of how good or bad the business is doing.

So what did Quinn do wrong? They reserved their claims too low. They had enough money to pay everything else, but because they underestimated their claims, they have run out of money before they have run out of claims.

In the industry, there are 3 general ways to reserve a claim (work out how much money you need to pay the claim, 36square). They are:

Best case - The lowest you could settle the case for
Worst case - The most you think you will have to pay if everything goes wrong
Realistic - The "best guess" of what is the most likely outcome

The general rule is that your reserve should be somewhere between worst case and realistic. On some you will pay less and on some you will pay more, but by going somewhere between the realistic and the worst case, you either break even on costs or build a small buffer that can be "put back into profits" at a later date. This changes when you start dealing with the Hurricane (very big storms mostly in the US, 36square; not the plane) Sector when you reserve for the worst and hope for the best.

Quinn have been widely criticised for under reserving their claims, so this is nothing new. The problem has been that they've been getting away with doing so for some time, because they've had a couple of good years. Now that they've hit some realistic (I won't say bad, because they are not) years, they are in trouble and have no money left to spend out.

Usually, a company would raise funds from assets in this situation. The problem is that some directors of the company have bound assets up in various schemes, so they cannot release any capital (money, 36square). As a result the Irish Regulator has sought to protect what is left of the company by pusing it into administration (telling the naughty directors that they are not allowed to run the company any more, 36 square).

Does that help?

Oscar_The_Grouch

former_student wrote: »

This poster is a troll.

Just under 1,200 posts and over 650 thanks makes me a troll does it?
When I get to 2,000 posts and 1,200 thanks, do I get promoted to ogre?

Still; I'd rather be a troll than a Quinn employee - I do have some standards.

former_student wrote: »

Can I also remind you that this is an NI forum.

No need to remind me; I know. Thank you for trying though.

As you are undoubtedly aware, Quinn are (amongst other things and only allegedly) an insurance company. They trade in Ireland and the UK (I am sure you will be aware "UK" is the accepted international abbreviation for The United Kingdom of Great Britain and Northern Ireland) and employ quite a few people in NI. As a result, there is a joint interest in the NI and Insurance boards.

Personal questions: why are you a "former student"? What went wrong?

Oscar_The_Grouch

What? No responses from the accusers? Finally coming round to the fact that you're wrong and the rest of the market is right? That's a first for Quinn.

Additional evidence for the defence:

http://www.insurancetimes.co.uk/story.asp?storycode=383885

In summary, Quinn have appointed a specialist to restructure their insurance arm. This means that they take over the board of Quinn Insurance (they've been appointed to the board already) and try to buy some time from the Regulator to find out what can be salvaged from the business.

Quinn have admitted that this is so "the executive management are not diverted from the vitally important job of running our Manufacturing business". In other words, they are trying to divorce themselves from the insurance arm.

This is all for the benefit of the next court appointment next week. Mr McKillop will stand up and say "I'm in charge now and will clean up the business". No matter what the outcome, expect some Quinn numpty to post on here next Monday that everything is going well and "yey! Aren't we fantastic!!".

If you know a Quinn employee, ask them one simple question: Where is their CEO; Colin Morgan?