Markerstudy Insurance Company Limited made a loss of £4.5m in 2009 after strengthening prior year reserves by £11m.
The 2009 loss compares with a profit of £764,574 in 2008.
Markerstudy noted in its results filing with the Gibraltar Registry of Companies that the whole motor insurance industry was suffering higher claims bills as a result of inflationary pressures. These include credit hire costs, claims farming and an increase in low-level bodily injury claims with multiple claimants.
“The company has not been immune to these pressures and has strengthened reserves on prior underwriting years by some £11m,” the filing said.
Partly as a result of the reserve strengthening, claims incurred, net of reinsurance, increased 80% to £24.4m from £13.5m. This resulted in a technical loss of £1.8m in 2009 compared with a technical profit of £2.4m in 2008.
However, Markerstudy group underwriting director Gary Humphreys told insurancetimes.co.uk that the 2010 technical result was “much improved”. He added that although there was further reserve strengthening for the prior years that were still subject to claims farming activity, he said the hike was “nothing like as significant as previous years. We took most of the pain [in 2009]”.