danish insurer expects further capital investment in 2018 as talks continue with potential third party investors
Unrated Danish insurer Gefion Insurance A/S has called on shareholders to boost solvency.
Gefion boosted its capital reserves by €2m as it sets about improving its capital adequacy under Solvency II.
As at 31 December 2017, Gefion reported an excess over its Solvency Capital Requirements (SCR) of DKK27.7m(£3.3m), amounting to a SCR coverage ratio of 123%.
But at the end of April 2018 shareholders agreed to a €2m capital injection, improving the excess over the SCR to DKK42.8m and resulting in an updated SCR coverage ratio of 135%.
Gefion offers capacity to a number of UK brokers and MGAs.
Gefion chief executive, Tonny Anker-Svendsen said: “The capital injection was made by the existing shareholders of the company, who remain committed to strengthen the capital position of the company with a view to facilitate the positive trend that we currently experience.”
Gefion reinsurance changes
Other action taken by the insurer to improve its solvency position includes increasing its average quota share reinsurance from 75% last year to 85% for 2018, reducing Gefion’s net insurance risk exposure and consequently improving its SCR coverage ratio.
The insurer also revealed in its annual report that it is in advanced talks with potential third-party investors about further increasing the company’s share capital before the end of 2018.
The capital injection comes after a year of significant growth for the insurer, with gross written premiums more than doubling to DKK1.8bn in 2017, up from DKK0.8bn in 2016.
Profitability has also improved, with Gefion reporting a profitable combined operating ratio (COR) of 98.7% for 2017, improving on the 100.9% reported for the previous year.
Gefion’s latest set of results come at a troubled time for unrated insurers following the collapse of fellow Danish insurer Alpha.
Unrated Alpha Insurance A/S filed for bankruptcy on 9 May 2018 after its reinsurance partner CBL Insurance Limited suffered its own solvency problems, leading to chaotic scenes in London as policyholders scrambled to find new cover.