28th May 2015 08:40
LONDON (Alliance News) - Gable Holdings Inc Thursday said it swung to a loss in 2014, with the AIM-listed non-life insurer saying it provided additional reserves to reduce a gap between the reserves it carries and the actuarial best estimate.
Gable's pretax loss amounted to GBP5.4 million in 2014, a significant reversal from the GBP7.2 million pretax profit reported for the prior year.
While growth in gross written premiums drove revenue up to GBP51.5 million from GBP42.2 million, net claims - the difference between claims incurred by Gable and the share taken by reinsurers - increased to GBP35.4 million from GBP18.0 million. Expenses incurred in insurance activities increased to GBP15.6 million from GBP12.1 million.
"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 GBP3.1 million," Chief Executive William Dewsall said in a statement.
"This, together with a UK based claim amounting to GBP5.2 million, of which GBP3.2 million is recoverable under reinsurance, has disproportionately impacted our results given our relatively small size," Dewsall said.
The CEO said the company decided to strengthen its booked reserves in a move that follows on from work that started last year.
Dewsall said that involves "the application of an explicit reserving risk margin of GBP6.3 million". The gap between Gable's reserves and those of the actuarial best estimate stood at GBP7.5 million - a gap the company intends to plug in 2015 - compared with GBP13.8 million at the end of 2013.
"We anticipate making a final charge of GBP7.5 million in the current year, following this we anticipate that our internal and external actuarial ultimate loss ratio estimates will have converged," the CEO said.
Meanwhile, the insurer said it made a strong start to 2015, with record gross written premium in the first quarter.
"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," Dewsall said.
A new product for Italian motor fleets, which had been expected to begin with an initial programme of EUR10 million of gross written premiums per annum, has seen Gable write EUR40 million of that bust business to date. The company expects that to increase to EUR75 million on an annuallised basis.
"We fully expect 2015 to result in a record year of growth with our pipeline of new business providing the next stage of momentum for the group," Dewsall said.
The company said it intends to review its dividend policy in the fourth quarter with a view to initiating a dividend in 2016.
Shares in Gable were down 11.8% at 31.75 pence on Thursday morning.
By Samuel Agini; [email protected]; @samuelagini
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