Lichtenstein-based insurer vows further reserve strengthening in 2015 after announcing £7.5m reserving gap
Unrated Lichtenstein-based insurer Gable has crashed to a £5.4m loss for 2014 after having to inject £6.3m into reserves.
And the insurer has announced it will strengthen reserves by a further £7.5m in 2015 to close the reserving gap to its actuarial best estimates, which was as high as £13.8m in 2013.
Writing in its financial results for the year ended 31 December 2014, Gable said: “The board has always been satisfied as to the adequacy of its reserves and… to differentiate between the niche underwriting strategy of the group and the estimates derived from market level benchmarks, the board has historically targeted held reserves below the independent actuary’s best estimate, but within their range.”
However, this strategy appears to have now changed, with reserve strengthening through 2014 and 2015 aimed at closing the reserving gap and bringing reserves at the insurer in line with actuarial best estimates.
Despite the loss for 2014, Gable reported record gross written premium (GWP) for the year, bringing in £80m for 2014, compared to just £58.9m in 2013.
The insurer also reported a combined operating ratio (COR) before the effect of reserve releases of 87%.
This comes despite the insurer suffering from sizeable claims in both the UK and France.
Chief executive William Dewsall said: ”Our 2014 results have been impacted by a significant fire claim in France, which, including reinsurance reinstatement and net of reinsurance ultimately cost the company £3.1m.
”This, together with a UK based claim amounting to £5.2m, of which £3.2m is recoverable under reinsurance, has disproportionately impacted our results given our relatively small size.”
Dewsall added: “2015 has begun strongly with record GWP in Q1 reflecting the group’s strong franchise and range of innovative niche products. The group continues to see attractive new business opportunities which are well supported by quota share reinsurance arrangements with major reinsurers.
“We expect these partnerships to continue as our pipeline of new business opportunities grows and we are also exploring a number of strategic alternatives in order to seek to optimise returns on equity.”
In the UK, Gable offers brokers a number of products, including after the event (ATE) financial litiagtion cover, commercial combined policies, ATE legal expenses cover and construction liability insurance.