Euro zone threat to Quinn

Those figures last week from Quinn Direct, Sean Quinn's insurance offshoot, were pretty staggering. And it must pose the serious question as to whether the Quinn operation will be the next one to be involved in the rationalisation of the Irish insurance industry.

Conventional wisdom has it that, with financial services in the euro zone being reduced to a small number of large players, a country the size of the Republic cannot support 19 general and 18 life insurance companies. Conventional wisdom also has it that insurers in the Irish market will need a market share in double figures if they are to survive in the long term.

That means that a lot of rationalisation remains to be done and it's arguable that, given the scale of its losses, Sean Quinn might be willing to listen to offers for Quinn Direct.

Certainly, it's hard to see Quinn Direct growing to the extent where it can realistically challenge the likes of Hibernian, Allianz and AXA.

Is there really a niche for a small domestic insurer when the competition is European giants like those three?

It has to be said in Quinn's favour that the direct insurance company built up a decent amount of business from pretty much a standing start.

Certainly, Quinn Direct's competitors in the general insurance market will not be slow to highlight the company's trading position last year. Investment losses of £15.6 million show that the group was far too exposed to equity markets and poses serious question marks over its asset allocation strategy. Add in the underwriting losses of almost £23 million, which includes a £16 million readjustment to previous reserves, and it's anything but a pretty picture for the company.

Current Account was also intrigued by the comments from a Quinn spokesman that the group wants to offload majority stakes in some of its subsidiaries, including cement, over the next three to five years.

Rumour has it that the group had previously planned a market flotation in that same timeframe but presumably the scale of the Quinn Direct losses and the scale of competition in glass and cement has led to a fundamental rethink.

As far as the cement business is concerned, potential investors or "strategic partners" are few and far between, and it's hard to see much further than Blue Circle, which has extensive cement operations in the North. As for the glass business - which operates in a heavily oversupplied market - it's hard to see a clamour of buyers.