Danish insurer enjoys major growth due to UK and stresses strong reinsurance means it has a solid risk structure
Unrated Danish insurer Gefion grew gross premiums to MDKK 1,204 (£140m) in the first half of this year – up 60% on the same period last year.
But combined ratio deteriorated to 99.3% (2017: 96.3) amid rising claims.
Pre-tax profits fell from 18.3MDKK (£2.14m) to 4.3MDKK (£0.5m), according to its half-year report.
Bad weather on motor took its toll as the Danish insurer had gross paid claims costs more than double to MDKK400 (£46.8m).
Gefion blamed snow and ice for a major reason behind the deterioration of the claims ratio from 61.3% to this year’s 73.4%.
“The half-year results reflect the seasonality of the business. While net earned premiums are relatively stable from month to month, underwriting results vary significantly by months as they affected by changes in weather conditions.
“The cold winter weather in late February and early March across Europe have led to increased claims costs on the motor business due to the snow and ice,” it said.
Gefion risk structure
The insurer says it has 20 binders across Europe and the majority of its business comes from the UK.
Gefion has relationships with a number of UK motor brokers and motor MGAs including Pukka, Bollington, Staveley Head and Prestige, according to its Solvency and Financial Conditions Report (SFCR).
Management stress their exposure is limited by heavy reinsurance, with risk laid off to A-rated strongly capitalised reinsurers.
They have a quota share arrangement and maximum single loss capped at €500,000.
Solvency capital rose from 1.17 to 1.27.
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