Increased income from premiums despite falling rates helped Quinn Direct Insurance make a pretax profit of €153 million in 2004, a 19 per cent increase over the previous year.

Further premium cuts are expected in 2005.

Written premiums increased by 33 per cent to €473 million last year, while underwriting profits increased 36 per cent to €98 million.

Quinn Direct said underwriting margins had been maintained despite reductions in the average premiums charged to consumers and that this had been achieved through ongoing operational efficiencies, proactive claims management and strong underwriting.

The Quinn Direct performance helped to boost profits at the overall Quinn Group, which rose by nearly 40 per cent to €221 million last year. The group is also believed to have met its target of raising turnover by almost 70 per cent to €1 billion, although it has not yet released figures.

Last year was a period of rapid expansion both organically and through acquisition at the Quinn Group.

The biggest Irish deal completed by the firm over the year was the acquisition of radiator and plastics firm, Barlo, for €84 million. It also spent €145 million on hotels in Prague in 2004.

Insurance arm Quinn Direct said yesterday that it was pleased with the positive start to the company's operations in the UK, where it opened its first sales support office at Salford Quays in Manchester.

Quinn Direct now employs more than 1,000 people in its five offices in the Republic and the UK. Quinn Direct general manager Kevin Lunney said the company had a significant cost advantage over its competitors that enabled it to pass on savings to customers.

"Prices have reduced by more than 10 per cent on average in the period, in line with previous years, and similar reductions are expected in the current year."

Mr Lunney said the competitiveness of its pricing was reflected in the 33 per cent growth in premium income.