Quinn Insurance given a new lease of life as Liberty makes mark
With plans to open a Belfast office and aiming to appeal to the mass market, one American firm has high hopes for a bright future here, writes Margaret Canning
The rise and fall of Fermanagh tycoon Sean Quinn and his business empire was the most dramatic episode of the economic downturn. But the one-time jewel in his empire, Quinn Insurance, is staging a comeback in Northern Ireland as its new American owner makes its mark.
Boston-based Liberty Insurance, a mutual company, has been operating in the Republic since its deal to buy QI in partnership with then-Anglo Irish Bank two years ago – but its official entry in to Northern Ireland's insurance market has been slower, as it is classed as a separate side of the business.
Now it has plans to increase its share of the market and will open a commercial insurance office in Belfast over the next six months, employing five to 10 people. The company has also appointed Invest NI chairman Mark Ennis to its board for a Northern Ireland perspective.
Chief executive Patrick O'Brien said it would aim to increase market share – and said he'd keep jobs in the areas of Cavan and Fermanagh most closely linked with QI.
"Enniskillen is our call centre for the Republic, the north and Great Britain. Ultimately it's a critical part of what we do.
"The people who are answering the phones and interacting with customers every day, it's a critical part of it all. We'd like to think there are opportunities to grow in Enniskillen in time."
There were jobs cuts, however: "The business had shrunk significantly so we had to rationalise staffing from November last year to March.
"We've put that behind us now and we believe we have a solid foundation in place and we're looking to grow now."
"A lot of what we'll do depends on success of business. We're just starting in Northern Ireland.
"There are three divisions – in the Republic, more stable and progressing nicely – we're just starting in the north and we're starting to write motor insurance in Great Britain.
"In time we would hope that the company will be bigger and that will lead to future employment opportunities, but at the moment it's about stability and building a strong foundation."
Around 285 people left Quinn Insurance, including 70 in Enniskillen, towards the end of last year as part of the redundancy programme. There are also operations in Blanchardstown and Cavan which took a bigger hit.
Quinn Insurance has still been writing business in the north of Ireland and Great Britain under the administration – now those 300 staff in Enniskillen in Northern Ireland will be selling Liberty products.
And, unlike IBRC, whose staff have been attacked a number of times as they took over other parts of the Quinn empire, Liberty Insurance has enjoyed a smooth transition in to Enniskillen and Cavan. "People have been very positive about what we are doing," Mr O'Brien said. "They have seen that liberty is coming in and is very committed to the communities in Cavan and Enniskillen, so people have been very welcoming."
He will concentrate growth plans on QI's depleted share of the market of 4-5%.
"Back in time, Quinn pre-administration was writing motor, home commercial at peak, and had 15 to 18% market share in Northern Ireland.
"During the administration process they had to cease writing business in home and commercial but allowed to continue writing motor, so naturally the business contracted in that time.
"What we want to do is grow that business back and we think we can be a significant player in the north – in the top three or top five."
Part of the long-term plan is to offer commercial insurance, mainly through a broker model, which will require the company to open a commercial insurance office employing between five and 10 people in Belfast.
"If we're going to be in the commercial market, most of the brokers are located here in Belfast, so we need to be serving those people with people on the ground here. We're working through plans at the minute – we haven't looked at space yet but it will be in the city centre."
Liberty took control of Quinn Insurance in a complex deal involving now-defunct Anglo Irish Bank (now Irish Banking Resolution Corporation), which owns 49% of Quinn, with Liberty owning the remaining 51%.
"We bought the entire Republic of Ireland business. Every policy that was originally written by Quinn in the Republic of Ireland transferred across to Liberty and we bought all assets, the buildings, the IT systems, the people and so on.
"We also got a renewal rights option to buy the Quinn business in the UK, so Quinn Insurance under administration was writing motor business in Northern Ireland and Great Britain."
They exercised the option to take over the UK business at the end of last year. It wants to be a 'mass-market' insurer in home, motor and commercial insurance in Northern Ireland, but will focus on the motor market in Great Britain.
And they are waiting for the day when they can take over Quinn outright and end the partnership with IBRC. "We entered in to arrangement with IBRC and have a good relationship with them, and it's worth saying that IBRC played no role in the running of the business on a day-to-day business and they are a passive partner."
The liquidation of IBRC, announced earlier this year, did take them by surprise, though the Liberty M&A division in Boston is in talks on a complete takeover. Being the full owner will "create more certainty".
"From a brand perspective, everybody recognises that Liberty is a very big financial institution with the fifth largest market share in the world and a lot of expertise and scale.
"But we have a partner that's a bankrupt bank and that's not the ideal partnership."
He said that what sets Liberty apart is the "quality of our offering". "Our positioning is a quality product and service at competitive prices. We've changed a fair bit of the historical Quinn product.
"We will be bringing a US product of better car replacement, so that if you're involved in an accident we'll replace your vehicle with a car that is one year newer and with 10,000 fewer miles on the clock, so that's a little bit of a bonus.
"It comes back to our service ethos. Being in a bad accident is a difficult scenario and we want to be there for you in your hour of need and the better car replacement policy is supposed to ease the pain of being in a serious accident.
"We don't claim to be the cheapest in the market but we do believe in value for money. It's striking the balance between offering people the security and peace of mind they need and securing that competitive price."
They will insure across the board, ending Quinn's close association with younger drivers. "The strategy is to be broader and a mass market supplier."
Another unique aspect of Quinn Insurance was the use of self-employed agents to negotiate directly with injured parties.
"They employed regional claim managers to provide speedy service, so they had people going round at scenes and they called round to customers very quickly. We've retained that and we have smoothed out some of the edges around it, but it had a lot of positives.
"It was innovative and it was pioneering fast settlement of claims and we believe it's in everyone's interests to settle claims quickly, because the customer/claimant gets their money quickly and it's in nobody's interests if lawyers take forever.
"But it's also in everyone's interests that settlements were fair and that wasn't always the case historically with Quinn. But we've addressed that and we believe we are taking the best of the Quinn model and adding to that Liberty expertise."