Claims bill from December floods is expected to be between £2m and £3m after reinsurance arrangements
Gable is expecting to report a pre-tax loss of between £7m and £8m for 2015, the insurer has revealed today in a trading update.
It also admits that it has entered transitional measures under Solvency II, which gives it an extra two years to hit the Solvency Capital Requirement (SCR).
The insurer said the pre-tax loss had been caused by:
- A £7.5 million provision to eliminate the remaining balance of the pre-2012 historical reserving gap
- The cost of the Quota Share agreement as announced in December 2015
- Claims bill from the December floods which is expected to be between £2m and £3m after taking into account its reinsurance arrangements
Despite the expected loss, Gable is expecting to report that its gross written premiums for the year to 31 December 2015 grew by 25% to over £100m.
The insurer says it is also experiencing high retention rates, while it is expecting to report more than a 40% increase in cash and liquid investment balances to £60m.
Gable added that it would continue to review its underwriting portfolio and has initiated a programme to review business which does not meet its underwriting criteria.
Earlier this month the insurer was replaced on two business lines it wrote for underwriting agency Iprism.
The tradesmen’s business Gable wrote has shifted to QBE European Operations, while Gallagher-owned Pen Underwriting has picked up the high net worth household business.
Chief executive William Dewsall said: “Gable produced another year of growth in the underlying business with a strong core underwriting performance which was achieved in challenging markets.
”The overall performance was impacted only at the year-end by the severe December storms and floods, and we were once again quick to respond to our customers’ requirements in getting many businesses back in action following the storms, whilst Gable was also well protected through its reinsurance arrangements, limiting the ultimate financial impact.
“We remain focussed on delivering underwriting profits with a strong and growing cash position which has continued to increase by over 40% on 2014.”