More than 900 jobs are to be cut at Quinn Insurance as part of a restructuring plan to address the company’s insolvency issues, the joint administrators announced this afternoon.
The downsizing, which represents 37 per cent of the 2,400 staff across its nine centres in Ireland and Britain, will be on a voluntary basis and take place over a 12-month period.
“This is a difficult announcement to make, and a considerably more difficult announcement for the workers of Quinn Insurance to hear. The scale of what we face is considerable,” said the administrators.
Approximately 350 employees will be affected across all locations in the first phase of the process. The worst-hit location is Blanchardstown where 301 employees are to lose their jobs.
The plan is to provide a severance package of four weeks pay per year of service, including bonus payments, plus statutory redundancy entitlements.
Some 226 employees are to be made redundant at the company’s headquarters in Cavan, with 121 going in the first phase.
The plan will also see 179 workers made redundant at the Enniskillen office with further 109 going from the company's Navan office.
The Derrylin claims divisions in Fermanagh will be cut 27, and a further 48 are due to to go at the insurer’s Manchester office.
The company's Dublin office on O’Connell Street will see staffing numbers cut by four, and further six will be made redundant in the London office.
The administrators said loss-making lines of business will be discontinued.
The company said it would meet with members of the employees’ representative committee on May 4th to commence consultation with employee representatives.
Earlier the Quinn group announced it had decided to sell-off its insurance division in an effort to address solvency issues which led to the insurer being placed in adminstration last month.
The group said in a statement the funding required to meet the solvency requirements laid down by the Financial Regulator and the future of Quinn Insurance were "probably best protected under new ownership".
Taoiseach Brian Cowen today expressed concern for the workers, saying the Government would use state agencies to assist in “whatever way it could”.
But he insisted the plan by the administrators to return the company to a stable financial footing had to be considered first.
Minister for Enterprise, Trade and Innovation Batt O’Keeffe yesterday pulled out of a week-long trade mission to Australia so he could deal with the fallout from today’s announcement.
The regulator yesterday gave the go-ahead for Quinn Insurance to re-enter the motor insurance market in the UK.
In a statement the regulator said its decision to allow the company re-enter the motor insurance market followed “careful consideration”.
“This decision has been made following detailed discussions with the Financial Services Authority in the UK and joint administrators of Quinn Insurance Ltd and permits the reopening of private motor business (new and renewals) of Quinn Insurance Ltd UK,” the regulator stated.
Quinn Insurance welcomed the decision. "This means that we are now open for business for all private motor drivers in the UK (including Northern Ireland) which accounted for a significant majority of our UK business pre-administration," it said.
The administrators – Paul McCann and Michael McAteer of Grant Thornton – said they would continue to work with the regulator on the potential of reopening other business lines.
Workers’ representatives from Quinn Insurance told the Oireachtas Joint Committee on Enterprise, Trade and Employment yesterday that redundancies were “completely unnecessary” as its core business remained profitable.
In a joint address, they expressed anger at finding out through the media that up to 800 staff may be made redundant as part of a restructuring plan to address the company’s insolvency issues.
They claimed the insurer was losing up to 2,000 customers a day because of the restrictions imposed by the regulator on its ability to write and renew business in the UK.
The insurer was being forced to turn away business which could help save jobs, they said, warning that the company’s UK customer base would be “completely eradicated” within 12 months if the situation continued.
Business leaders in counties Cavan and Fermanagh have expressed grave concern at the job losses, describing it as an economic “tsunami” for the region.
Last month, the High Court placed Quinn Insurance into administration after regulator Matthew Elderfield raised concerns about its solvency levels.
The Quinn Group employs more than 8,000 people across the UK and Ireland through the flagship insurance firm and cement, quarry, glass and property businesses.
Projected redundancies:
Cavan Office: 226 redundancies expected, covering all areas and grades with 121 in the first phase
Derrylin Claims Division: 27 redundancies expected, covering all areas and grades with 9 in the first phase
Blanchardstown: 301 redundancies expected, covering all areas and grades with 65 in the first phase
O'Connell St: 4 redundancies expected, covering all areas and grades with 2 in the first phase
Navan: 109 redundancies expected, covering all areas and grades with 37 in the first phase
Enniskillen: 179 redundancies expected, covering all areas and grades with 87 in the first phase
Manchester: 48 redundancies expected, covering all areas and grades with 24 in the first phase
London: 6 redundancies expected, covering all areas and grades with 5 in the first phase.