Quinn Insurance, the leading insurance firm founded by tycoon Sean Quinn, had losses of 706 million euro in 2009.
Operating losses represented EUR 559m and EUR 147m was due to write-downs of assets. EUR 333m of the loss comes from the UK insurance business, the bulk of that loss relating to non-motor insurance.
The losses will mean a claim of around €600m on the Insurance Compensation Fund (ICF), which will be paid for through a levy on all non-life insurance holders in the Republic.
The fund is intended to ensure that customers of all insurance companies get paid even if their own insurer gets into financial difficulty.
Michael McAteer and Paul McCann, the administrators of the company, have also revealed they signed the deal today to sell off the company to Anglo Irish Bank and US insurance firm Liberty Mutual.
Liberty Mutual will inject €102m into the company and Anglo Irish Bank will put in €98m to re-stabilise the company, which will be called Liberty Mutual Direct Insurance.
All 1,570 jobs will be saved across their three locations in Fermanagh, Cavan and Dublin, they said.
The company expects to record a further €160m of losses in 2010.
They have stated however that since March 2010 their losses have been stemmed.
The ICF will be called upon at the end of 2011 for compensation of around €180m.
However, the profits from Liberty Mutual Direct Insurance will also be used to reduce the amount needed from the ICF.
“In accepting the proposal, we have successfully mitigated against the worst case scenario – one in which a sale of Quinn Insurance Limited did not occur and where, as a consequence, the Insurance Compensation Fund was liable for the total liabilities of the company,” commented Mr McAteer.
Source : Inside Ireland
