The unrated insurer says it hopes a series of measures will turn its fortunes around
Struggling unrated Danish insurer Gefion has said it is working on several solutions to its ongoing liquidity problems after it was told by the country’s financial regulator that it must hold liquid assets of at least €5m by the end of the year.
Gefion added that the solutions ”are expected to be implemented over the course of the next two to three weeks. At the same time, discussions with potential capital providers are on-going and are expected to be finalised in the beginning of 2020.”
In a statement issued yesterday, the Danish Financial Supervisory Authority said it: ”considers that the company has serious liquidity problems”.
”Hence, the interests of the policyholders and beneficiaries are at risk and the Danish Financial Supervisory Authority therefore ordered the company to take the necessary measures in order to have liquid assets of at least [€5m] by end of December 2019 towards the end of February 2020,” it said.
Gefion said that it expected the situation to “normalise”, and predicted “significant improvements resulting from the termination of loss-making portfolios as well as from improved underwriting and claims handling initiatives”.
It also hoped that improved credit terms, as well as the others measures, would offset the impact on declining premium volumes.
The insurer had been growing rapidly in the UK motor market, but a poor underwriting result for 2018 and a worsening solvency ratio saw it hit the rails. In April, it had to restate its financial accounts and in July, finance provider Premium Credit said it would no longer finance policies where Gefion is the underlying carrier.
The specialty lines insurer was given a €6m cash injection in October by Fermat Capital Management.
In September, Gefion filed a law suit along with bankrupt Qudos Insurance AS against a Lloyd’s coverholder, alleging they have together lost £8.8m because of inefficiencies in claims management processes.
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