State would lose €360m if Quinn Insurance goes

THE COST to the State of Quinn Insurance ceasing operations in Ireland would be €360 million, according to a report commissioned by lobby group Concerned Irish Business.

The group, comprised of people who do business with Quinn Group, argues that the potential loss for the economy justifies a €450 million Government investment to prop up Quinn Insurance. The insurance firm has been in administration since the end of March, following the discovery of a solvency hole.

Citing figures contained in a report drawn up by economist Constantin Gurdgiev, group spokesman John Maguire, said the existing plan for 900 redundancies at Quinn Insurance would cost the State €130 million per year in lost taxes, social welfare payments and spending.

The figure, which presumes none of the affected workers finds new employment, is key to the group’s efforts to win support for a proposed Quinn Insurance bailout.

The lobby group wants the Government to issue a €450 million bond to recapitalise Quinn Insurance and thus satisfy the solvency requirements of the Financial Regulator.

This would, they argue, set the company on a sure financial footing and allow for the repayment of the Quinn family’s €2.8 billion debt to Anglo Irish Bank within seven years.

This is based on the company delivering 5 per cent profit growth per year and paying 8 per cent interest on the Government’s bond.