Premium finance providers cautiously accepting new Gefion policies as brokers seek replacement Premium Credit deals

Gefion brokers are scrambling for new cover amid the crisis at the unrated Danish carrier - and one major premium finance provider has already agreed to step in and help.

PremFina says it is taking on Gefion brokers on a case by case basis, although it is limiting its exposure.

Bexhill will also consider requests for help from Gefion brokers on a case by case basis. 

The Danish insurer is in crisis after Premium Credit said it would cease to finance policies where unrated Gefion is the underlying carrier, following the news that the its solvency ratio was recently recalculated at 105%.

If Gefion cannot restore its solvency ratio to 135% by mid-August, brokers with Gefion customers will have to either have to find a new provider of premium finance at renewal or seek a new carrier.


PremFina is one premium finance provider which has already received several broker enquiries into whether the it could finance Gefion premiums previously funded by Premium Credit.

Bundeep Rangar, chief executive of PremFina, revealed to Insurance Times that after meeting with Gefion representatives yesterday his business would continue approving Gefion financings and had even approved some that day with existing brokers.

He said Premium Credit’s decision presented opportunities to other premium finance providers.

But he specified that PremFina would limit its overall exposure on Gefion policies and was only offering recourse deals on personal lines policies. Commercial lines deals are being assessed on a case-by-case basis.

“Whenever there is a bit of turmoil there is also an opportunity, and as long as we’re being diligent about what we’re funding then I’m not going to complain if people send business our way,” Rangar said.

“We have certain limits that we have to stay under in terms of overall unrated policies that we finance.”


To ensure PremFina does not exceed its unrated limit, he said brokers placing Gefion premiums with the provider will also have to place more strongly rated business.

“In our overall portfolio we have to keep a threshold of how much business we can finance where there is unrated capacity behind it,” he added.

“If we were to increase the amount of Gefion business then proportionately it distorts that limit, so brokers will then have to give us some rated business to make it work.”

Rangar in October 2018 had said PremFina was open to offering non-recourse deals on premiums written by unrated insurers, and that the deal offered depended on whether the capacity provider passed PremFina’s own financial tests.

Close Brothers, one of the two biggest premium finance providers in the UK, has so far remained silent on its stance towards financing new Gefion policies. However, Insurance Times understands the provider is looking to continue only offering recourse deals on Gefion-backed policies – having taken that position in October last year.


Ravi Takhar, chief executive of premium finance provider Bexhill, said he has so far made no decision on whether to accept new Gefion business, due to its tiny exposure.

If Bexhill were to receive an influx of enquiries from brokers looking to for replacement financing arrangements on Gefion policies, Takhar said he would approach each on a case-by-case basis.

“What we’d look at is the insurance broker first and the quality and standing of that insurance broker, and then we’d look at where the insurance broker was placing their policies,” Takhar said. “It’s not a blanket no from us, we’d need to consider each case on its own merits.”

He said for a premium finance provider with a higher exposure to Gefion policies, like Premium Credit, exiting completely was a “prudent and reasonable approach to the risk”.

Should Bexhill’s exposure increase to the financing of Gefion business, Takhar said he would reassess the situation, and whether or not to offer non-recourse deals.

He said: “The problem with non-recourse in that situation is if there’s no cover then the borrower has no obligation to pay, so the premium finance provider is completely out of pocket.

“It would be a brave finance provider who’d be willing to provide that sort of finance without any sort of recourse.

“It’s something we keep a constant review on, but it’s not something we’ve got a particularly concentrated exposure to at the moment.”