Quinn Insurance returns to profit as losses halted
Quinn Insurance is on the brink of moving back into the black after registering large losses for the last two years when the firm was controlled by the Quinn family and its team of executives.
The UK business has just moved into profit on a week-by-week basis for the first time this year, said administrators Grant Thornton.
On average, the company's UK motor insurance business has implemented price increases of 25%, helping the UK business to stage a recovery, even though the volume of business has dropped.
Quinn Insurance lost about €49m in 2008 and is expected to register losses of approximately €50m for 2009. However, improving the 2010 performance has been the key objective of the administration team.
This team - led by Michael McAteer and Paul McCann of Grant Thornton - is concentrating on getting the business to break even or post a profit on a week-by-week (or run rate) basis.
The problems earlier this year when the company was placed in administration are likely to prevent 2010 being profitable in its entirety, but the administrators are confident that losses are now at an end and the changed performance will attract suitors to the company, which is still owned by Sean Quinn and his family. The company will have to take a €10m charge in 2010 to cover redundancy costs.
Mr McAteer said the company hadn't suffered a major drop in business in Ireland since administration, with premium income down by only "single digits" against the same period last year.
He said there had been little change in pricing, but UK motor insurance prices were up by about 25% - "giving less volume, but more revenue".
The UK business lost €44m last year, but it may be possible to get it to break even at least this year, Grant Thornton said.
The company took on the administration in late March and Quinn Insurance was effectively out of the UK market for about eight weeks. This is going to curb profitability in 2010. The other key factor is that Grant Thornton's investment strategy will be more conservative and therefore investment returns will be lower than a commercial company would expect.