15th Jul 2016 07:40
LONDON (Alliance News) - Gable Holdings Inc on Friday said its loss widened in 2015 due to a number of one-off provisions and said it was implementing a strategic restructuring plan following changes in the regulatory landscape.
Non-life insurer Gable posted a pretax loss of GBP24.3 million for 2015, widened from GBP5.4 million a year earlier, despite revenue rising to GBP60.4 million from GBP51.5 million, after incurring a number of one-off charges.
Gable noted a GBP7.5 million provision to eliminate the remaining balance of the pre-2012 historical reserving gap, and said the provision to fully write off the debtor relating to an after-the-event insurance policy rose to GBP7.9 million from GBP6.0 million.
Meanwhile, provisions for claims relating to floods in the UK and Europe in December amounted to a net loss of GBP2.0 million, and GBP4.3 million of goodwill relating to its purchase of Gable Insurance AG in 2005 was written off to recognise the impact of restructuring.
Gable said a strategic review was ongoing, but said it was initially implementing a strategic restructuring plan to meet the "challenges of the new regulatory environment brought about by the introduction of Solvency II". Solvency II came into force in January and is a European Union-wide directive which focuses on the amount of capital European insurers need to hold to reduce the risk of insolvency.
Under its new restructuring plan, Gable said it will implement a new business model and will write niche lines of business, which will be fully compliant with the Solvency II directive.
Gable said it was not offering any dividend, in line with a year earlier, saying the retention of earnings within the business is in the current interests of shareholders with the requirements of the Solvency II directive and the impact of its strategic review meaning this is unlikely to change in the short to medium term.
However, Gable said its passporting into Europe was unaffected by the UK's vote to leave the European Union as it is located in Liechtenstein.
"Following the announcement of a strategic review of Gable's business, I can confirm that, after consultation with our regulator, the FMA, we are taking steps to implement a solution which will operate under the new Solvency II regime," said Chief Executive William Dewsall.
"The regulatory landscape since we started the business has changed dramatically which has necessitated the strategic review and we are now proceeding with discussions with a range of parties which will require a significant restructuring of the group's business and scale of underwriting operations in order to provide a solution to ensure compliance with Solvency II across all lines of business," Dewsall added.
Shares in Gable were suspended from trading pending the publication of the 2015 results. Gable did not say when its shares would resume trading.
By Hannah Boland; [email protected]; @Hannaheboland
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