I welcome Minister Noonan's comments that he is "at a loss to see how such a large underestimation, and the corresponding scale of what is required from the Insurance Compensation Fund ("ICF"), could not have been foreseen to a greater extent before now" and that Irish Government was "misled".
"I have said all along that Quinn Insurance (the "Company" or "QIL") was placed into Administration unnecessarily and on the basis of incorrect assumptions relied on by the Regulator, regarding the effects the Quinn Groups guarantees had on the solvency position of QIL.
These guarantees were in place since 2005, were signed off by Auditors and were historically viewed as having no effect whatsoever on the solvency position of the Company; this was the appropriate treatment of the guarantees and has since been verified by legal opinion.
The reality is that the Company was outperforming all its competitors immediately prior to being unnecessarily placed into Administration with the incalculable damage being inflicted thereafter.
Since 2008, the Company, under the newly appointed board as agreed with the Regulator, continued to perform remarkably well. Despite the recession, the first quarter of 2010 was one of, if not the best quarter, in QIL's history. In this quarter the Company reduced its claims by more than 2,800 and increased its cash position by 20 million Euro, which left QIL with an average reserve of more than twice the industry average, not to forget the 2,500 jobs that the Company was sustaining.
The figures purportedly required by the Administrators from the ICF are truly shocking. The Court and Dept of Finance should seek further information on how they arrived at this astronomical figure, as even according to the Administrator's own figures produced in March of this year; the Company had a loss ratio of 75.09% between 2004 and 2008, with only 2,593, claims remaining open for this period, therefore any suggestion that QIL was not profitable are completely unfounded.
Furthermore, the Company has been settling circa. 95% of its claims within the first 12 months and a further 45% of the balance the year after, leaving only a small percentage of claims open after two years, so any suggestion that the previous management where underproviding for claims are groundless.
My biggest regret in all of this is not challenging the provisional appointment of the Administrators, however from the outset they actively discouraged us to do so under the guise that our best prospects of regaining control of the Company was by working through the issues with them. How naïve we were. The Administrators completely sidelined us and effectively set about destroying one of the most profitable Company's in Irish corporate history; while blaming the previous management in the process.
All this coming from the very people who openly admitted to the Irish Times on 25th February 2011 to knowing absolutely nothing about the Irish Insurance Industry prior to their appointment as Administrators
However, as is clear from Minister Noonan's statement we were not the only ones 'misled'.
I believe that history will ultimately demonstrate that the deal between Anglo Irish Bank and Liberty Mutual will be recognised as the worst possible outcome for the State. The Administrators should not have been appointed in the first instance, however even if this is disputed, the Quinn family's proposal would have retained 100% of the Company for the benefit of the State at a fraction of the cost of the Liberty deal."