Irish insurer in crisis as regulators order urgent action

Dublin-based insurer CBL Insurance Europe is crisis after the Central Bank of Ireland ordered it to bolster capital and reserves.

The group has also had its shares suspended by New Zealand and Australian regulators. 

The insurer sells products into EU markets including builders warranty, rent guarantee and income protection. 

In Ireland, it sells solicitors’ PI and home insurance. 

It uses UK brokers and has an office off Gracechurch Street near Lloyd’s of London. 

The firm’s troubles originally began when the Reserve Bank of New Zealand raised concerns about the company’s reserves in its largest market, France.

It’s French construction insurance business made up 61% of it’s GWP in 2016, even though it trades in many other European countries, including Italy and Scandinavia.

As a result, AM Best released a note, downgrading its credit from ‘A-’ to ‘B++‘.

Then, the New Zealand Stock Exchange suspended share trading of its parent company, CBL Corporation, citing concerns that the market doesn’t have all the information it needs.

Now the Central Bank of Ireland has also ordered the firm to boost its capital and reserves. 

CBL Corp confirmed it was seeking extra capital after posting a full-year loss of between $75 million and $85 million and that it expected the downgrade as a result.

In a statement, the company said: “The Central Bank of Ireland [has] commenced a supervisory engagement process in respect of CBL Insurance Europe. As a result, the Central Bank of Ireland has issued a number of directions and conditions on CBL Insurance Europe intended to strengthen its capital base, reserves and reinsurance security, and has asked CBL Insurance Europe to commission an independent skilled persons’ report into CBL’s French construction business.”

Since having its shares suspended on the New Zealand Stock Exchange, CBL has requested its shares also be suspended on the Australian Stock Exchange, saying it is “still working towards a capital raise, but the timing, as well as the proposed amount, has not been finalised.”