L
Lark
Guest
Just when the Quinn debate was running out of steam, two very interesting pieces in today's Independent on Quinn Direct and Quinn Cement.
T
Troy
Guest
Shades of ICI/AIB?
:rolleyes
:rolleyes
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CM
Guest
Rumour & innuendo
Troy - maybe you could expand on your contribution please?
Troy - maybe you could expand on your contribution please?
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tedd
Guest
Re: Hmmmm....
Yes, very interesting, especially as QL proponents argue that each subsidiary of the Quinn empire is separate from the others. In this scenario, this seems not to be the case. Definitely food for thought.
Yes, very interesting, especially as QL proponents argue that each subsidiary of the Quinn empire is separate from the others. In this scenario, this seems not to be the case. Definitely food for thought.
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Troy
Guest
R & I
I wasn't innu'ing anything CM. Just recalling the last time a successful operation got sucked into the black hole of insurance.:rolleyes
I wasn't innu'ing anything CM. Just recalling the last time a successful operation got sucked into the black hole of insurance.:rolleyes
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Nanny
Guest
Capital injection
From the article it semms that the general insurance operation got caught by the classic general insurance cycle at its worst, a fall in investment income coupled to underwriting loss'es.
Mr Quinn however seems determined to ride it out, after all they've built the biggest direct general insurance business in the country, and heaven knows we need the competition very badly due to mergers and the like.
The injection I would have thought is a good sign the the regulatory checks and balances are in place. This would have been triggered by the DETE. The Quinn Group is estimated to be worth over a billion, comparisons to the est. £650 million taxpayer bail out of AIB in the early eighties is a stretch I would have thought.
From the article it semms that the general insurance operation got caught by the classic general insurance cycle at its worst, a fall in investment income coupled to underwriting loss'es.
Mr Quinn however seems determined to ride it out, after all they've built the biggest direct general insurance business in the country, and heaven knows we need the competition very badly due to mergers and the like.
The injection I would have thought is a good sign the the regulatory checks and balances are in place. This would have been triggered by the DETE. The Quinn Group is estimated to be worth over a billion, comparisons to the est. £650 million taxpayer bail out of AIB in the early eighties is a stretch I would have thought.
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Troy
Guest
AIB/ICI cost the taxpayer nuffin'
:rolleyes
:rolleyes
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Nanny
Guest
AIB Bail Out
Remember the bank levy? The Irish State had to stand over a potential black hole of £650m. In the end the extended underwriting loss'es were less, but it did cost.
Remember the bank levy? The Irish State had to stand over a potential black hole of £650m. In the end the extended underwriting loss'es were less, but it did cost.
C
Copernicus
Guest
More from Niall Brady
Niall Brady had an interesting piece in the Tribune at the weekend about Quinn Direct. Seems like they tried to recoup growing underwriting losses by taking a punt on the Nasdaq - not a very suitable investment strategy for a motor insurance company, I would have thought.
Niall Brady had an interesting piece in the Tribune at the weekend about Quinn Direct. Seems like they tried to recoup growing underwriting losses by taking a punt on the Nasdaq - not a very suitable investment strategy for a motor insurance company, I would have thought.
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Nanny
Guest
Tech Punt
Yeah, saw that. They probably won't try that again in a hurry. I'd imagine some parameters have been put in place to prevent wild swings in asset allocation into the future. If the tech market hadn't tanked we might never have heard about it, I suppose.
But we do need to see more competitors in the market, and lets hope Quinns first bloody nose won't steer others away, from what must be Europes most expensive and difficult underwriting markets.Quinn's should be encouraged to stick it out and to grow. Others might follow.
We certainly appear to be paying for our cultural fixation with spurious, and grossly excessive compensation claims. Not to mention dangerous driving, drink, and aggression where 1st world cars zip along 3rd world roads. The expected 20% to 30% hike in premiums to offset a staggering 90% hike in underwriting losses means I think we've the early start of a crisis on our hands. No good puting all the responsibility on the Insurers when we've a public that appear to see insurance as a soft target for petty fraud.
I know it's a related but different subject, but the troubles of one player shouldn't detract us from the big undelying issue, I would suggest.
Yeah, saw that. They probably won't try that again in a hurry. I'd imagine some parameters have been put in place to prevent wild swings in asset allocation into the future. If the tech market hadn't tanked we might never have heard about it, I suppose.
But we do need to see more competitors in the market, and lets hope Quinns first bloody nose won't steer others away, from what must be Europes most expensive and difficult underwriting markets.Quinn's should be encouraged to stick it out and to grow. Others might follow.
We certainly appear to be paying for our cultural fixation with spurious, and grossly excessive compensation claims. Not to mention dangerous driving, drink, and aggression where 1st world cars zip along 3rd world roads. The expected 20% to 30% hike in premiums to offset a staggering 90% hike in underwriting losses means I think we've the early start of a crisis on our hands. No good puting all the responsibility on the Insurers when we've a public that appear to see insurance as a soft target for petty fraud.
I know it's a related but different subject, but the troubles of one player shouldn't detract us from the big undelying issue, I would suggest.
Brendan Burgess
Founder
- Messages
- 52,184
A huge number of issues in this thread...
<!--EZCODE BOLD START--> Taxpayer's bailout of AIB<!--EZCODE BOLD END-->
Everyone always refers to this as if the Government gave AIB some money. It's the very opposite in fact.
AIB bought the Insurance Corporation of Ireland in about 1982.
About two years later, it realized that its subsidiary was a disastrous investment and was fully entitled to put its subsidiary into liquidation and write off its investment. It would have had no further liability.
The Government decided to put the company into administration to protect the policyholders and the claimants.
If AIB had not bought ICI, ICI would still have gone to the wall and no one would have blamed AIB.
I have been pointing this out for years - and no one is listening. It just seems good fun to attack the banks.
<!--EZCODE BOLD START--> The supposed motor insurance rip-off <!--EZCODE BOLD END-->
I find it extraordinary that a Government commission can conclude that motor insurers are ripping off their customers! Quinn Direct shows it is relatively easy for a new competitor to enter the market but that it is very difficult to make money in this market.
Nanny gives a good summary of why we have expensive insurance in Ireland. But again, I suppose it's good fun to attack the insurance companies.
<!--EZCODE BOLD START--> Quinn Direct is a separate company<!--EZCODE BOLD END-->
As I understand it, Quinn Direct, the general insurance company is separate from Quinn Life and from the other Quinn companies. The same person owns them, but that is the only connection. It should reassure people that the owner pumps in more money when things go wrong.
<!--EZCODE BOLD START--> Investment strategy of Quinn Direct<!--EZCODE BOLD END-->
The best long term strategy for a privately owned insurance company is to invest in equities. The owner has shown that he can tolerate the volatility of the stockmarket.
It is funny though, that Quinn Life's main marketing point is that passive tracking of indices produces a better return than active management.
Brendan
<!--EZCODE BOLD START--> Taxpayer's bailout of AIB<!--EZCODE BOLD END-->
Everyone always refers to this as if the Government gave AIB some money. It's the very opposite in fact.
AIB bought the Insurance Corporation of Ireland in about 1982.
About two years later, it realized that its subsidiary was a disastrous investment and was fully entitled to put its subsidiary into liquidation and write off its investment. It would have had no further liability.
The Government decided to put the company into administration to protect the policyholders and the claimants.
If AIB had not bought ICI, ICI would still have gone to the wall and no one would have blamed AIB.
I have been pointing this out for years - and no one is listening. It just seems good fun to attack the banks.
<!--EZCODE BOLD START--> The supposed motor insurance rip-off <!--EZCODE BOLD END-->
I find it extraordinary that a Government commission can conclude that motor insurers are ripping off their customers! Quinn Direct shows it is relatively easy for a new competitor to enter the market but that it is very difficult to make money in this market.
Nanny gives a good summary of why we have expensive insurance in Ireland. But again, I suppose it's good fun to attack the insurance companies.
<!--EZCODE BOLD START--> Quinn Direct is a separate company<!--EZCODE BOLD END-->
As I understand it, Quinn Direct, the general insurance company is separate from Quinn Life and from the other Quinn companies. The same person owns them, but that is the only connection. It should reassure people that the owner pumps in more money when things go wrong.
<!--EZCODE BOLD START--> Investment strategy of Quinn Direct<!--EZCODE BOLD END-->
The best long term strategy for a privately owned insurance company is to invest in equities. The owner has shown that he can tolerate the volatility of the stockmarket.
It is funny though, that Quinn Life's main marketing point is that passive tracking of indices produces a better return than active management.
Brendan
M
Madonna
Guest
Re: Indeed a Huge Number of Issues
Perhaps the most important issue for AAM investors and readers of <!--EZCODE ITALIC START--> The Book<!--EZCODE ITALIC END--> is just how reliable are QLD's supposedly rock bottom charges?
I think I would agree with you that the efforts to support the motor company suggest a long term commitment.
However, isn't it now clear how erroneous is the QL tactic - to attempt to win market share by undercutting the conventional market.
Long term savers with QLD want to ask themselves are the current low charges sustainable long term? or are they, just as in the case of motor, an attempt to buy market share? The difference is that QLD can increase their life charges at any time should the enterprise fail to gain market share, which by all accounts it has so far failed to do.
<!--EZCODE ITALIC START--> Boss<!--EZCODE ITALIC END--> I think the DIY guide should very much tone down its support for QLD. Anyone investing in QLD is gambling that it will attain the market share to honour the promised but not guaranteed low charges, early signs are that it will not attain those economies of scale and so will have to increase charges. :rolleyes
Perhaps the most important issue for AAM investors and readers of <!--EZCODE ITALIC START--> The Book<!--EZCODE ITALIC END--> is just how reliable are QLD's supposedly rock bottom charges?
I think I would agree with you that the efforts to support the motor company suggest a long term commitment.
However, isn't it now clear how erroneous is the QL tactic - to attempt to win market share by undercutting the conventional market.
Long term savers with QLD want to ask themselves are the current low charges sustainable long term? or are they, just as in the case of motor, an attempt to buy market share? The difference is that QLD can increase their life charges at any time should the enterprise fail to gain market share, which by all accounts it has so far failed to do.
<!--EZCODE ITALIC START--> Boss<!--EZCODE ITALIC END--> I think the DIY guide should very much tone down its support for QLD. Anyone investing in QLD is gambling that it will attain the market share to honour the promised but not guaranteed low charges, early signs are that it will not attain those economies of scale and so will have to increase charges. :rolleyes
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Nanny
Guest
Gambling
Madonna, the gambling bit is not really reflective. All investments require calculated risk taking, even deposits where the call is inflation and default risk.
Those invested in the Quinn Life operation know it's a start up. Heaven knows its been roundly bombarded for being so. I'm no fan of index tracking as the only way of making money, but with these products there is no guaranteed current or future liabilities in the product offering, hence no exit costs. No entry costs too if I'm not mistaken. That is a pretty clean crisp offering, just a fund charge of 1%pa.
That's what people have bought. They certainly didn't buy based on brand. If fund charges go up, Quinn's lose the business. There is nothing to stop a Quinn Life customer from encashing, unlike many other offerings around with discretionary charges, and lock downs.
The Life Regulator will be responsible for ensuring that the Life company meets all of its solency requirements. I think that casting a shadow over the maverick life operation could be misinterpretted as scare mongering, since it is a fundamentally different proposition than a general insurer, ( remember ICI Life sold for big bucks to the PRU, while the general business ran aground?).
There is no justification for claiming unacceptable risk against the Quinn Life company. If there is one you can rest assured that the clamour would start at a different level than here in AAM, with respects to all participants.
Madonna, the gambling bit is not really reflective. All investments require calculated risk taking, even deposits where the call is inflation and default risk.
Those invested in the Quinn Life operation know it's a start up. Heaven knows its been roundly bombarded for being so. I'm no fan of index tracking as the only way of making money, but with these products there is no guaranteed current or future liabilities in the product offering, hence no exit costs. No entry costs too if I'm not mistaken. That is a pretty clean crisp offering, just a fund charge of 1%pa.
That's what people have bought. They certainly didn't buy based on brand. If fund charges go up, Quinn's lose the business. There is nothing to stop a Quinn Life customer from encashing, unlike many other offerings around with discretionary charges, and lock downs.
The Life Regulator will be responsible for ensuring that the Life company meets all of its solency requirements. I think that casting a shadow over the maverick life operation could be misinterpretted as scare mongering, since it is a fundamentally different proposition than a general insurer, ( remember ICI Life sold for big bucks to the PRU, while the general business ran aground?).
There is no justification for claiming unacceptable risk against the Quinn Life company. If there is one you can rest assured that the clamour would start at a different level than here in AAM, with respects to all participants.
Brendan Burgess
Founder
- Messages
- 52,184
Re: Gambling
Nanny
Well said!
I actually posted a similar, but not as eloquent,reply at lunchtime today but for some reason it didn't appear.
In short, if Quinn Life puts up its charges, its clients can leave.
If a fund manager with initial or exit charges, raises its charges, you take a hit if you leave.
Brendan
There - I told you it was not as eloquent!
Nanny
Well said!
I actually posted a similar, but not as eloquent,reply at lunchtime today but for some reason it didn't appear.
In short, if Quinn Life puts up its charges, its clients can leave.
If a fund manager with initial or exit charges, raises its charges, you take a hit if you leave.
Brendan
There - I told you it was not as eloquent!
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tedd
Guest
Re: Gambling
But surely if QL decides to alter its charging structure in the future, it could introduce an exit charge (witness Equitable Life)
But surely if QL decides to alter its charging structure in the future, it could introduce an exit charge (witness Equitable Life)
M
monksfield
Guest
Quinn
I would have thought the weekend coverage raised serious questions about the senior management of the group & its strategy.
If the insurance business is as badly run/uncompetitive as Sean Quinn says, it should be possible to undercut the incumbents and still make money.It would seem to me that scale is their biggest problem and the current business model does not seem to be winning.
I also thought the Nasdaq dimension was quite revealing in terms of attitude to risk - if mirrored in terms of 'gung ho' underwriting ,large losses will be inevitable at some point.
While I would have considerable confidence that the regulatory framework in both the Life and General businesses would prevent them going to the wall, the owner's capacity ( or willingness) to keep injecting money should not be taken for granted.
My guess is that in the absence of a 'trade' buyer Quinn will not be in the insurance business in 3 years time.
I should declare my interests here as have worked in both the General and Life businesses and believe that despite the apparent attraction of the direct model,both businesses are well served by the vast majority of the Broking fraternity.
I would have thought the weekend coverage raised serious questions about the senior management of the group & its strategy.
If the insurance business is as badly run/uncompetitive as Sean Quinn says, it should be possible to undercut the incumbents and still make money.It would seem to me that scale is their biggest problem and the current business model does not seem to be winning.
I also thought the Nasdaq dimension was quite revealing in terms of attitude to risk - if mirrored in terms of 'gung ho' underwriting ,large losses will be inevitable at some point.
While I would have considerable confidence that the regulatory framework in both the Life and General businesses would prevent them going to the wall, the owner's capacity ( or willingness) to keep injecting money should not be taken for granted.
My guess is that in the absence of a 'trade' buyer Quinn will not be in the insurance business in 3 years time.
I should declare my interests here as have worked in both the General and Life businesses and believe that despite the apparent attraction of the direct model,both businesses are well served by the vast majority of the Broking fraternity.
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CM
Guest
EL
<!--EZCODE BOLD START--> But surely if QL decides to alter its charging structure in the future, it could introduce an exit charge (witness Equitable Life)<!--EZCODE BOLD END-->
This is a case of apples and oranges. EL always had the right to introduce MVAs and/or non-guaranteed bonus changes even if they traditionally did not implement them. The fact that <!--EZCODE ITALIC START--> have<!--EZCODE ITALIC END--> used these to protect the WP funds generally since the whole GAR debacle is neither here nor there in relation to what QL might or might not do in the future.
<!--EZCODE BOLD START--> But surely if QL decides to alter its charging structure in the future, it could introduce an exit charge (witness Equitable Life)<!--EZCODE BOLD END-->
This is a case of apples and oranges. EL always had the right to introduce MVAs and/or non-guaranteed bonus changes even if they traditionally did not implement them. The fact that <!--EZCODE ITALIC START--> have<!--EZCODE ITALIC END--> used these to protect the WP funds generally since the whole GAR debacle is neither here nor there in relation to what QL might or might not do in the future.
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tedd
Guest
Re: EL
I mention EL simply to illustrate the point that because there are one set of rules today, it does not guarantee that things will not change if a company's financial situation changes.
So my question is, <!--EZCODE BOLD START--> could<!--EZCODE BOLD END--> Quinn decide to impose an exit charge on current investors?
I mention EL simply to illustrate the point that because there are one set of rules today, it does not guarantee that things will not change if a company's financial situation changes.
So my question is, <!--EZCODE BOLD START--> could<!--EZCODE BOLD END--> Quinn decide to impose an exit charge on current investors?
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CM
Guest
QL and the possibility of exit charges
<!--EZCODE BOLD START--> So my question is, could Quinn decide to impose an exit charge on current investors?<!--EZCODE BOLD END-->
Good question. Whatever about them introducing an exit charge for new customers, I would have assumed that the fact that there is no exit charge is part of the (presumably contractual) terms & conditions of any existing customers' policies. However I don't know that this <!--EZCODE ITALIC START--> is<!--EZCODE ITALIC END-->, in fact, the case.
<!--EZCODE BOLD START--> So my question is, could Quinn decide to impose an exit charge on current investors?<!--EZCODE BOLD END-->
Good question. Whatever about them introducing an exit charge for new customers, I would have assumed that the fact that there is no exit charge is part of the (presumably contractual) terms & conditions of any existing customers' policies. However I don't know that this <!--EZCODE ITALIC START--> is<!--EZCODE ITALIC END-->, in fact, the case.