Loss-making Gefion to cut under-performing broker/MGA business

Unrated insurer Gefion sank to an underwriting loss in 2018 - and has vowed to pull business on unprofitable intermediaries. 

The Danish carrier, which recently had to restate its accounts amid regulatory intervention, admitted it’s underwriting result was ‘unsastifactory’ as the combined ratio fell from 98.7% in 2017 to a loss making 101.8% in 2018.

Large claims in the UK and Poland, as well as reserve strengthening, saw the gross claims ratio shoot up 23.7% to 90.5%.

Reserves boost and intermediary action 

Poland was one of the countries, along with Germany and and Ireland, where an independent actuarial review recommended beefing up bodily injury reserves, the 2018 annual report reveals.

Following a shareholder capital injection of around £4.7m in May, Gefion has strengthened its balance sheet and now has a solvency ratio of 1.30. 

Now Gefion, which had been through a period of booming growth, is determined to get improved results, and has vowed underwriting action if necessary. 

”The majority of the start-ups that Gefion Insurance started supporting at the inception of their business have now matured into MGA’s of volume and profitability leaving the Company in the position to reap the upside of the initial years of investment.

”The passing of time and the transitioning of Gefion Insurance from a start-up into a more matured market participant have also allowed Gefion Insurance to identify non-performing parts of the business Gefion Insurance, which will lead to the company leaving non-performing areas to improve its profitability.”

Summarising 2018, Geffion said: ”In conclusion 2018 was a difficult year for Gefion Insurance with increased market focus on unrated insurers following the demise of several competitors with similar business models and the commencement of the ordinary inspection review by DFSA with resulting focus on internal matters and pressure from partners and stakeholders.”