Inside the world of business
Quinn Insurance's foray into UK market a costly disaster
TODAY’S HEARING in the High Court should shed light on why the black hole at Quinn Insurance has more than doubled in size in less than a year and why the cost to the Insurance Compensation Fund could rise to a worst-case €1.65 billion.
The administrators appointed to the insurer and the head of general insurance supervision at the Central Bank, Domhnall Cullinan, will be on hand to walk the president of the High Court through the reasons for the costs of claims arising from the administration.
The supporters of businessman Seán Quinn in his fight against Irish Bank Resolution Corporation, the former Anglo Irish Bank, would do well to tune in and hear the reasons for the devastating losses, mostly due to Quinn Insurance’s push into the UK market.
The losses on under-reserving for future claims and selling insurance policies at unprofitable levels in the UK, on motor and commercial policies and professional indemnity insurance, account for an estimated €700 million to €800 million of the costs.
A further €200 million of the call on the compensation fund arises from the pay-off to banks and bondholders of the Quinn Group to wipe out the guarantees given by the insurer’s subsidiaries to cover their debts – guarantees that led to the administration.
Bankrupt businessman Seán Quinn has repeatedly talked about how cash-rich Quinn Insurance was in the three months leading up to the appointment of the administrators in March 2010. The main reason for this was it had filled its boots by selling UK policies at prices that rivals couldn’t match because they didn’t make any financial sense.
There is no doubt that Quinn shook up the Irish insurance market by slashing costs and keeping a tight rein on claims.
The UK market was a different beast but Quinn assumed he could slay it as he had in Ireland. His march into the UK has been nothing short of a disaster.
More than a few unripe Apples on display as tech giants sueTHERE’S NOW a library of books purporting to reveal the secret to Apple’s success, of varying degrees of quality.
However, since last week we are starting to get first-hand accounts from the core of the company. A federal courtroom in San Jose, California, has started to hear a patent lawsuit which Apple has brought against Samsung Electronics. The US giant Apple claims that its Asian rival copied its designs for the iPhone and the iPad. In the process of proving its case Apple has started to draw back the curtain on the inner workings that led to the creation of its game-changing technology.
Like many of the best inventions that radically overhaul a market, what seemed like incredibly intuitive ideas were in fact the result of enormous trials and several dead-ends.
We have already heard from Christopher Stringer, a long-time industrial designer at Apple, who outlined the efforts the firm goes through to create these prototypes. According to reports in last week’s New York Times, he told the court that 15 or 16 designers worked together around a kitchen table. When it came time to plan the devices, the company tried almost everything. There were iPads of various exaggerated shapes and sizes. Some of the early prototypes of the iPhone were bizarre. One, a long black rectangle, looked twice the size it should be. Others had beautifully curved glass screens. Another resembled an old silver iPod that just happened to be a phone, too. And there’s the strangest of all: an iPhone that looked like a stretched hexagon made of cheap black plastic.
While in court, Philip W Schiller, Apple’s senior vice president for worldwide product marketing, also divulged the company’s advertising budgets – often more than $100 million a year for the iPhone alone. Tech fans can look forward to yet more first-hand revelations from inside the world of Apple.
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