The story of brokers' troubled relationship with Gefion and Tansar

Fearful brokers watching the collapse of a string of unrated insurers pulled business on Gefion’s key trading partner Tansar, documents show.

Tansar started five years ago with high hopes of becoming a brokers’ favourite in the private vehicle market.

But that ambition is over as the firm is in administration following a troubled relationship with unrated Danish insurer Gefion. 

Smooth first year 

The story begin in April 2016, when Tansar first launched after months of preparation. 

Lockton Re secured Gefion as the capacity provider. 

According to Tansar’s administrators writing on Companies House documents, Tansar thought they had sealed a solid provider.

“Although unrated, (as with the position with all Danish insurers at the time), Gefion was seen by Lockton Re as a solid company with an attractive and safe environment for Tansar customers”, the administrator writes.

The first year of trading was smooth, although there was a disagreement over payment for Tansar doing the claims handling, the administrator reveals.

There was an ’ambiguity’ in the contract signed between Gefion and Tansar. 

Gefion believed Tansar’s claims handling charge was included in the commission, whereas Tansar believed it was in addition. 

Tansar eventually took a hit on the core commission charge. 

Despite this disagreement, around £24m gross written premium was successfully clocked up between March 2016 and March 2017.

Tansar had further problems when the Ogden rate table change forced up reinsurance costs at Gefion, leading to Tansar having to reduce its core commissions. 

Tansar’s introducing brokers also took a hit on their commissions. However, the impact on trading was still ‘fairly minimal’. Tansar still traded successfully and the future looked bright.

Troubles begin 

However, things really began to go downhill in 2018 following the failures of both unrated Danish insurers Alpha and Qudos. 

Tansar’s already worried introducing brokers were hit by further cuts to commissions, passed down from Tansar, who itself had taken yet took another commission hit from Gefion, the administrator’s notes show. 

Many agents began restricting business or even suspending trading. 

The commission cuts didn’t stop there.

In April 2019, Tansar had yet another commission cut imposed by Gefion.

This led to Tansar telling Gefion it had no choice but to stop trading, the documents state. 

Keen to prevent this happening, Gefion said it would acquire the Tansar business, or pave the way for a third party to take over. A new commission deal was reached, and Tansar’s trading could continue. 

But in April 2019 Gefion suffered a fresh blow which threw a spanner in the works. 

The Danish regulator swooped for a second time amid concerns about Gefion’s liquidity.

With the Danish regulator’s intervention, it became clear to both Tansar and Gefion that the FCA would never allow a full acquisition to happen.

Determined to find another way, a Gefion coverholder was lined up to acquire Tansar. 

But this hope was finally extinguished on March 25 when the Danish regulator stopped Gefion trading. 

Having run out of all options, just two days later Tansar directors applied for a formal insolvency to protect the business. 

Staff were made redundant on March 31 and trading stopped. It was over for good.