THE FINANCIAL Regulator yesterday gave the go-ahead for Quinn Insurance Ltd to re-enter the motor insurance market in the UK.
The announcement was made by the regulator less than 24 hours before the insurer’s joint administrators – Paul McCann and Michael McAteer of Grant Thornton – inform staff of their plans to downsize the business.
About 800 staff among the 2,400-strong workforce are expected to be made redundant on voluntary terms. The administrators will announce details of their plan today.
Minister for Enterprise, Trade and Innovation Batt O’Keeffe yesterday pulled out of a week-long trade mission to Australia to make himself available to deal with the fallout from today’s announcement.
A source close to the Minister said he had contacted the various State job creation and training agencies to discuss how they might be able to assist the Quinn employees who are laid off.
Mr O’Keeffe planned to travel to Australia on Saturday but has asked his Minister of State, Billy Kelleher, to lead the Enterprise Ireland trade mission to Sydney, Melbourne and Canberra in his place.
In a statement yesterday, the Financial Regulator said its decision to allow Quinn Insurance to re-enter the motor insurance market followed “careful consideration”.
“This decision has been made following detailed discussions with the Financial Services Authority in the UK and joint administrators of Quinn Insurance Ltd and permits the reopening of private motor business (new and renewals) of Quinn Insurance Ltd UK,” the regulator stated.
Quinn Insurance welcomed the decision. “This means that we are now open for business for all private motor drivers in the UK (including Northern Ireland) which accounted for a significant majority of our UK business pre-administration.
“However, the re-entry into full licence drivers incorporates significant pricing changes which we believe will lead to significantly lower volumes than were previously written by Quinn Insurance Ltd in the UK private motor market.
“Nonetheless this is an important step in the process of ensuring the return of Quinn Insurance Ltd to a sound financial and commercial footing.”
The administrators said they would continue to work with the regulator on the potential of reopening other business lines.
“We now look forward to again providing a full range of cover to private motor customers in the UK and especially being in a position to offer renewal terms to existing customers,” they added.
It is understood that the administrators were finalising the details of their restructuring plan late last night in light of the regulator’s decision yesterday.
Workers’ representatives from Quinn Insurance told the Oireachtas Joint Committee on Enterprise, Trade and Employment yesterday that redundancies were “completely unnecessary” as its core business remained profitable.
In a joint address, they claimed the insurer was losing up to 2,000 customers a day because of the restrictions imposed by the Financial Regulator on its ability to write and renew business in the UK.
The insurer was being forced to turn away business which could help save jobs, they said, warning that the company’s UK customer base would be “completely eradicated” within 12 months if the situation continued.
Business leaders in counties Cavan and Fermanagh expressed grave concern yesterday at the expected job losses, describing it as an economic “tsunami” for the region.