FBD and Allianz interested in buying Quinn Insurance

POTENTIAL BUYERS:TWO MAJOR players in the Irish insurance market confirmed they are interested in buying Quinn Insurance following the announcement yesterday that the business has been put up for sale.

FBD Insurance said, while there were significant variables involved, the Irish-listed company would consider purchasing the business.

“If such a move was seen to offer the opportunity of increased shareholder value, we would consider it,” a spokesman said. “However, there are so many factors still unclear that it is not possible to consider that option at this time.” Excluding the health insurance market, FBD is the second largest company in the Irish insurance market.

Allianz stressed it was premature to discuss its possible interest in the business but said the company was not “ruling in or ruling out” acquiring the business. A spokesman said any potential purchase would depend on price.

Aviva, the biggest insurer in the Irish market, said the company does not comment on speculation as regards to acquisitions.

Yesterday, joint administrators Paul McCann and Michael McAteer of Grant Thornton said they had received more than 40 expressions of interest in business from Ireland, the UK, Europe and the US. Mr McAteer said they had not yet engaged in a process with any of the interested parties. An information memo is being prepared and will be circulated to interested parties by the end of the month.

Market sources said yesterday Quinn Insurance could be sold off in different parts. Analysts also stressed the importance of price. “The issue for buyers is that they don’t know how big the financial hole is,” one Dublin analyst said.

Other analysts pointed out Quinn Insurance would be competing with other insurance businesses that had recently come on the market, such as Bank of Ireland’s New Ireland Assurance, which is being sold by the bank as part of its restructuring plan.

Yesterday, the Quinn Group said it would sell off its insurance division in an effort to address the solvency issues that led to the insurer being placed in administration in March. The group said the funding needed to meet the solvency requirements laid down by the financial regulator and the future of Quinn Insurance were “probably best protected under new ownership”.

Because the Quinn Group is the major shareholder of Quinn Insurance, the statement was issued by the Quinn Group rather than the joint administrators. Officially, it is the decision of the shareholder whether to sell the business, although the administrators and the financial regulator must approve the sale.

On Thursday, the regulator gave the go-ahead for Quinn Insurance to re-enter the motor insurance market in the UK following following “careful consideration”.