Danish regulator demands action as it identifies ‘serious liquidity problems’ at Gefion

By Jen Frost | News | 12 December 2019

Unrated Danish insurer Gefion Insurance must have liquid assets of at least €5m by the end of the year amid fears by the regulator that the company has “serious liquidity problems.”

A summary of the regulator’s order stated: “The Danish Financial Supervisory Authority considers that the company has serious liquidity problems.

“Hence, the interests of the policyholders and beneficiaries are at risk and the Danish Financial Supervisory Authority therefore ordered the company to take the necessary measures in order to have liquid assets of at least €5m by end of December 2019 towards the end of February 2020.”

Gefion has confirmed that it is in ongoing and “open” discussions with the regulator and admitted it has seen a decline in continued business premium volumes.

It issued this statement: “Following the closure of the ordinary inspection, Gefion Insurance has seen a significant decline in premium volumes. The decline in premium volumes are due to the cancellation of poor performing agents, but also the substantial fall in volumes on continued business. The decline has been more significant than expected and in addition, non-aligned credit terms offered to reinsurers and agents have further negatively impacted the liquidity position.

“Gefion Insurance has been in on-going and open discussions with the DFSA on our current liquidity position. Gefion Insurance is working on several solutions that in the short-term will improve the liquidity position of the Company. These solutions are expected to be implemented over the course of the next two to three weeks. At the same time, discussions with potential capital providers are on-going and are expected to be finalised in the beginning of 2020.

“Gefion Insurance expects the situation to normalize, and the Company projects significant improvements resulting from the termination of loss-making portfolios as well as from improved underwriting and claims handling initiatives. Not least, we expect to see improvements from reduced credit terms. The impact of these solutions is expected to offset the decline in premium “volumes.

“The DFSA has ordered Gefion Insurance to ensure that the Company has a liquidity buffer of €5 million by year end, which is in line with our own projections. With the above initiatives and solutions, the Company is of the view that this can be achieved.”

Turbulent year

In July the regulator ordered Gefion not to expand its business until it could secure more capital, after an inspection concluded that the insurer must impose a capital add on that meant its solvency ratio was just 86% as of 31 May 2019.

The capital injection of €6m was eventually secured months later in October of this year, from pre-existing backer Fermat.

Gefion underwrites a chunk of business in the UK and across Europe. It is understood that the insurer picked up business following the collapse of fellow Danish unrated insurer Alpha Insurance in 2018, with affected taxi drivers telling Post they had been sold Gefion policies.

Pukka, BCL and Cogent, Bollington’s Anjuna Underwriting, Euna, J&M, Octane, Prestige, Staveley Head and Tansar are all known to have used or be using capacity provided by Gefion.

Premium finance provider Premium Credit pulled out of funding further Gefion premiums earlier this year.

Searchlight trained on GRP as broker eyes PE deal

By Emmanuel Kenning | News | 12 December 2019

Global Risk Partners is in discussion with three private equity firms including Searchlight Capital Partners about taking a majority holding in the consolidator, Post can reveal.

The process, being run by Evercore, is believed to also include Apax Partners and Cinven.

Searchlight, Apax and Cinven declined to comment when approached by Post.

According to sources GRP is not exploring a trade sale. The company declined to comment.

It is understood that while the management will sell some of their holdings they will still retain a stake after an investment completes.

Speaking to sister title Insurance Age last year founder and chairman Peter Cullum indicated that the process for what he termed a “crystallisation event” would begin in 2019.

Since then the market has been awash with speculation about a possible deal which could still occur before Christmas or slip into 2020. It is expected to complete before the end of Q1 next year.

A partial sale to New York-headquartered Searchlight, which also has offices in London and Toronto, would mean another entrant into the crowded private equity backed broker market.

Similarly, Apax, which has in the past been linked to bids for Moneysupermarket and Saga, has a minority stake in US-based brokerage Assuredpartners having co-invested this February when it sold its majority holding to GTCR.

And Cinven is known in the UK insurance sector through its investment in Premium Credit in 2015.


GRP, formed in 2013 by Cullum, CEO David Margrett and COO Stephen Ross is currently backed by Penta Capital.

It was originally designed to target the London intermediated market but has grown to over £700m of premium with various parts including managing general agents and a hub and spoke model for regional broking often allowing existing management to retain a shareholding.

This has seen the consolidator buy up the likes of County Group in 2018 and Higos in 2017.

This year it has made over 15 acquisitions including London-based private client specialist broker Gauntlet Insurance Services last month

In its most recent set of results for the year to 31 March 2018 GRP posted an operating profit before amortisation and impairment costs of £10.2m.

While the bottom line loss was over £20m, Cullum told Post at the time that “run rate ebitda” was £35.3m.

Given recent multiples achieved for the sale of broker businesses this would put the value of the firm in the hundreds of millions.

ICO procedural errors in handling Eldon/Leave EU investigation exposed

By Jen Frost | News | 12 December 2019

The Information Commissioner’s Office will be hoping that procedural bungles do not jeopardise its proposed audit and fines of Eldon Insurance and Leave EU, after its legal counsel was forced to admit standards had fallen “well below” expectations, Post can reveal.

Speaking yesterday at a tribunal in London, Christopher Knight, counsel for the ICO in a three-day appeal hearing brought by Arron Banks-owned Eldon Insurance and Leave EU, said: “I don’t dispute there is room for criticism of the commissioner’s internal procedures and handling of aspects of this manner.”

He added: “I repeat the lack of documents around the assessment notice falls well below [expectations] of the commissioner.”

“I do, of course, accept the absence of decision-making documents in reference to these notices cannot be held up as a model of good governance and record keeping. I accept it falls short of the standards it should have been,” he continued.

“I also accept as a result I cannot ask for respect for my client’s reasoning where that reasoning is not readily before the tribunal,” Knight added.

During the course of the tribunal hearing, it was revealed that no internal documents existed illustrating any decision-making process prior to releasing 6 November 2018 notifications against Leave EU and Eldon Insurance.

The ICO was unable to provide any documentation to shows its considerations in the run-up to producing an assessment notice that would see the broker face an audit of its insurance data.

It also emerged that, following this lack of documentation, an internal memo was drafted days after key decisions had been made by 29 October, purporting to be a briefing note to advise the commissioner on taking these decisions. 

In addition it was revealed that a key draft document was held back by the executive and communications team at the ICO, to time its release at the time of a 6 November select committee hearing.

This was over a “matter of days,” Knight said. ”The commission is not sitting on these for months on end.”

Media and select committee

Meanwhile the notifications were sent to journalists under embargo on 5 November at 5pm, before they were officially released, with Eldon and Leave EU receiving their copies just half an hour earlier, at 4.30pm, the tribunal heard.

It was also told that a Digital, Culture, Media and Sport select committee received the documents on 5 November, prior to its session on Disinformation and Fake News the following day.

At the select committee hearing, information commissioner Elizabeth Denham told the panel that Eldon and Leave EU had been fined after failing to report a breach; this was factually incorrect, the tribunal heard, as these were preliminary notices.

Denham told the committee: “Eldon Insurance stated in response to our information notice, as you said, that it reported that breach to us when information was shared between Leave EU and Eldon Insurance. We found no evidence of its report of such a breach, and you know that we have issued fines against Eldon Insurance under the Privacy and Electronic Communications Regulations regulation.”

Knight added that if Eldon and Leave EU had wished to dispute the wide-spread dissemination of the notice, the “correct process” at the time would have been to launch a judicial review.

Under cross-examination, ICO director of investigations Stephen Eckersley described the process as a “race to complete a piece of work”.

Eldon and Leave EU counsel Gerry Facenna argued that the ICO’s mistakes over the 18 month process were tantamount to “procedural unfairness in a public law sense,” and went so far as labelling the investigation a “sham.”

Due to the ICO’s handling of the case, Eldon had sustained “serious reputational harm,” Facenna said.

It was suggested that LV cut ties with the broker following the ICO’s involvement, though this was disputed by the ICO, as Eldon owner Arron Banks had courted further negative publicity, for example via a National Crime Agency investigation into Brexit campaign funding.

According to an NCA statement date 24 September 2019: “The NCA has found no evidence that any criminal offences have been committed under PPERA or company law by any of the individuals or organisations referred to it by the Electoral Commission. It will therefore take no further action against Mr Banks, Ms Bilney, Better for the Country Ltd or Leave EU in respect of this specific matter.

“This investigation has been subject to press and social media commentary.  The NCA has not received any evidence to suggest that Mr Banks and his companies received funding from any third party to fund the loans, or that he acted as an agent on behalf of a third party.”

LV declined to comment when contacted by Post.

Facenna added: “We know there is no reasoning, no decision. Eckersley accepted in his evidence that the person who took those decisions thought there had been internal documents [showing a decision making process]. We now know that was not the case. There are no documents.”

According to Knight, these errors “do not relate to matters of procedural fairness at all, rather to internal procedures”.

He added: “It is not a submission that has any basis. He [Facenna] is fully entitled to say and I accept that it falls short of best practice, but he is not entitled to claim it is a sham without any evidence.”

The commissioner’s representative was also forced to deny allegations that it had timed the release of the documents and investigation to “bulk up” its Investigation into the use of data analytics in political campaigns report, published the same day as the select committee hearing.


The first-tier tribunal took place over a three day period earlier this week, with proceedings overseen by Judge Alison McKenna, alongside tribunal members Rosalind Tatam and Nigel Watson.

Eldon and Leave EU are appealing enforcement action by the ICO, in addition to the quantum of fines levied.

A decision is expected to be reached in February.

An ICO spokesperson said: “The ICO will not be commenting on ongoing proceedings until the decisions of the tribunal are published”.

Eldon and Leave EU have also declined to comment on the proceedings.

Eldon and Leave EU take a ‘two-faced’ and ‘cavalier’ approach to compliance: ICO

By Jen Frost | News | 12 December 2019

Arron Banks’ group of companies take a “two-faced approach” to regulation and the Information Commissioner’s Office should be allowed to maintain its fines and audit against Leave EU and Eldon, a tribunal heard.

Representatives for Eldon and Leave EU, and the ICO attended the third day of hearings in Eldon’s first-tier tribunal appeal against the regulator’s enforcement notices and proposed audit of the business.

Christopher Knight, counsel for the ICO, presented the body’s submission to a panel that included Judge Alison McKenna and tribunal members Rosalind Tatam and Nigel Watson.

During the course of proceedings, Knight denied that the timing of ICO enforcement notices on 6 November had been rushed through to bulk up its Investigation into the use of data analytics in political campaigns report.

He was also forced to counter arguments that the ICO had made errors that meant its investigation and notices were unfair and unlawful, although he admitted that the body itself had not lived up to expected governance standards.

However, he claimed this did not amount to any “bias” and did not necessarily mean the ICO had not come to the correct conclusions.

The previous day, the appellants’ counsel Gerry Facenna had alleged that the ICO’s proposed audit of Eldon’s insurance data was unlawful, in part because it had only contravened marketing regulations and was based on “hunches.”

To this, Knight responded that according to Section 146 of the Data Protection Act (2018): “There are no statutory preconditions to its exercise. There is no threshold to be met. There are no procedural requirements imposed. There is no requirement to seek representation on proportional assessment. There is not even a requirement to set out the reasons for the assessment in the notice.”

He stressed that the audit process is an “investigative tool” to enable the ICO to confirm whether policies were being followed.

The previous day Facenna had labelled it a “fishing expedition”.

On this, Knight added: “That is the precise purpose of the power and why it is drawn so widely.”

A number of concerns were laid down surrounding Eldon’s compliance practices and its governance structure,with Knight labelling the group of companies “two-faced” where it comes to regulation and alleging that this is a “cause for concern”.

He said: “The compliance face is Miss Bilney [Liz, Eldon and Leave EU CEO]. She’s the one who signs off all the lengthy information notice responses, who comes to give evidence to you about how seriously compliance is taken in the group.

“But the public face of the companies is Mr Banks, who when faced with a monetary penalty notice responds in a public press release in the name of a company, with a dismissive and frankly childish ‘whatever’.

“It is a striking theme of senior figures of the appellants that they themselves rely on the fact they openly and publicly lie in order to get attention. That is the gist of what Mr Banks said about himself. It is the gist of what Mr Wigmore [Andy, communications director] said about himself. Perhaps slightly ironically that may be true. But it is highly unusual and a cause for concern where an answer to huge number of compliance questions arising from what [they] have said have to be dismissed or nuanced or explained away as being incorrect, untrue or ill-informed,” Knight added.

Banks and Wigmore were not present at the hearing, which was attended by Bilney.

The ICO counsel raised concerns that the companies have a “significant overlap” of directors, but no written governance policies on how the split between these roles should be “perceived and recorded”.

There were also “blurred lines” between more junior employees at the group, Knight alleged, as evidenced by staff using both Rock Services and Leave EU email addresses interchangeably.

Staff had been seconded between both organisations, the tribunal heard.

The companies, which share a common ownership in Banks and CEO in Bilney, have a history of “non-compliance”, Knight alleged.

Leave EU has a penalty for the Mailchimp incident, in which its newsletters were sent to 319,645 Eldon customers, for which it has withdrawn its appeal.

Meanwhile sister company Better for the Country had previously faced a May 2016 £50,000 fine over a Privacy and Electronic Communications Regulations breach in relation to SMS direct marketing through a third party.

While the third party, Survation, ended up paying the fine back to the company, the leadership team should have learnt lessons from this, Knight implied.

Eldon was a clear instigator of the 20 emails containing its “spam sandwich” marketing sent to on average 50,000 subscribers at a time, he alleged, despite Eldon and Leave EU claiming this was instigated by the political campaign group rather than the other way around.

He noted that on one specific occasion Bilney had said there had been no complaints as a result of the emails; it later transpired there had been two. Bilney has referred to these as “grumbles”.

Eldon and Leave EU are contesting both quantum and imposition of the fines. On this, Knight argued: “In principle, a penalty will always be suitable. It will always sanction a person. It will always to some extent deter other wrongdoings. And it will always [encourage] compliance with PECR.”

However, he submitted that should the tribunal choose to change the quantum of the fines then it was in their hands whether the companies should be able to avail of an early bird discount.

Eldon, Leave EU and the ICO have declined to comment on the tribunal hearing.

Premium Credit names chief risk officer

By Pamela Kokoszka | News | 12 December 2019

Premium Credit has appointed James Wilson as chief risk officer.

Wilson is a member of the executive team and reports directly to CEO Tara Waite.

He joined Premium Credit in October 2019 from TD Wealth International where he was a non-executive director.

Wilson has over 30 years of experience working at senior level within various financial organisations, and worked with various UK and international regulators such as Financial Conduct Authority, the Information Commissioner’s office and the Confederation of British Industry.

He has held a variety of regulatory approved persons positions, including compliance oversight, risk management and money laundering reporting roles.

Wilson will be responsible for leading the company’s legal, risk and compliance functions.

Waite said: “Underpinning our proposition is a robust approach to risk helping our customers to flourish within our industry’s legal and regulatory structure.

“As the UK and Ireland’s foremost premium finance provider our priority is to deliver good outcomes for customers, our partners and our owners. James’ appointment is one example of our ongoing commitment to achieving this.”

Allianz appoints UK IT director

By Jen Frost | News | 12 December 2019

David Richards has been named as Allianz’s UK IT director.

Richards has been running Allianz’s IT function on an interim basis for the last nine months.

Richards was previously MS Amlin’s chief information officer.

He led the IT separation and migration programme for Direct Line and was a key figure in a Financial Services Compensation Scheme transformation programme.

Richards will report to Allianz chief operating officer Stephanie Smith.

Smith said: “Allianz is undergoing huge and exciting changes at the moment and David’s knowledge and experience will be invaluable as we look to 2020 and beyond.” 

Rising Star: Shaun Towner, MPW Insurance Brokers

By Shaun Towner, account executive, MPW Insurance Brokers | Opinion | 12 December 2019

After completing two CII qualifications in quick succession, Shaun Towner has already risen through the ranks to the position of account executive


July 2018 to present

Account executive, MPW Insurance Brokers

September 2012 to July 2018

Account handler construction/commercial, MPW Insurance Brokers

February 2010 to September 2012

Commercial account handler, Jelf

July 2008 to March 2010

Capita UK

How did you get into insurance?

As with many people in the industry, I fell into insurance following completion of my A-levels and applied for various jobs including an outsourcer that undertook processing activities for Hiscox.

What achievement are you most proud of?

The completion of Chartered Insurance Institute exams in relatively quick succession having been lucky enough to get funding through the Allianz scholarship in 2013, completing the CII diploma and advanced diploma within two years.

What would your advice be to other newcomers in the industry?

I would certainly recommend working in different departments within any given company, whether an insurer or broker in order to find a specialism or class of insurance that you enjoy. Expert knowledge of a certain class of insurance means that you can really add value that will set you apart from your peers. Listen and learn: you will learn something new every day.

If I wasn’t working in insurance, I would…

like to have worked in the legal profession, insurance law in particular.

What has been the biggest challenge in your career to date?

My biggest, and most recent, challenge was my job role changing from account handler to account executive, but so far I have achieved my financial and client retention targets and look forward to continuing this success in the future.

Where do you hope to be in 10 years?

In 10 years’ time I hope to be able to mentor others and share the knowledge that I have gained, while still progressing my career and knowledge in our specialist area of construction. 

Growing in confidence and becoming technically proficient in a short period of time, Shaun is a great example to any young insurance professional.”

Colin Donnellon, associate director, MPW Insurance Brokers

Blog: Shorter and flexible trial schemes - why aren’t insurers using them more?

By Stephen Netherway | Blog Post | 12 December 2019

Insurers will know that the litigation process is neither short, nor timely. Yet, that is changing, writes Stephen Netherway litigation partner at City law firm Devonshires.

The Business Court in England and Wales has now embedded in the High Court shorter and more flexible litigation procedures: the Shorter Trials Scheme and Flexible Trials Scheme.

These simplify court and trial processes and brings cases to a swifter trial and judgment, within about a year from the commencement of proceedings. It is something insurers should pay attention to in order to keep costs down and mitigate risk.

The FTS provides a slightly lower level of streamlining applicable to all cases, including focusing on shortening trial lengths by reducing oral evidence and submissions, but the aim of both is to “achieve shorter and earlier trials for business related litigation, at a reasonable and proportionate cost”.

STS has the greatest potential benefit to insurers. Under the STS, a simplified and abridged pre-action procedure replaces any otherwise applicable pre-action protocols. Crucially, the page length of statements of case, witness statements and expert reports are directed to be limited and disclosure is limited to documents relied upon or specifically requested. A designated judge is assigned to the case to keep continuity at pre-trial hearings and at trial, and applications will, where possible, be dealt with on paper. With trial length restricted to four days, cross-examination may be time restricted. Costs budgeting will not apply unless agreed.

Whether a case is suitable for the STS is at the court’s discretion. Cases involving multiple issues, multiple parties, public procurement issues or dishonesty allegations are identified as not suitable.

With abridged procedural turnaround times, the court driven target of an issued judgment within a year of issuing proceedings really brakes legal costs.

The courts have already signposted their appetite to support these alternative processes. In the 2018 case, Excel-Eucan Ltd v. Source Vagabond System Ltd, the defendants argued that the procedure was not suitable given case complexity, disclosure needs and trial length. The court disagreed: the statements of case might suggest complexity, but the real nub of the STS rested on whether the case can properly be heard in no more than four days and whether extensive disclosure and/or witness/expert evidence was needed. Assessing those matters, even recognising the need for five witnesses, the case was not assessed as having sufficient complexity to make the case unsuitable for the STS: the judge concluded that four days was enough to conclude the case.

There is also now the disclosure pilot. The aims of that focus on seeking to streamline and limit disclosure shares the STS aim of simplifying litigation processes and saving costs. While the disclosure pilot achieves this aim by providing a range of disclosure options, under the STS, key disclosure duties are instead directed to serving a bundle of core documents with their pleadings and make specific requests for any additional disclosure.

The STS offers a wholly different, alternative driver to speedier justice, accompanied by simplified and abridged processes, which naturally limits and saves legal costs.

Elite Insurance goes into administration

By Harry Curtis | News | 11 December 2019
Looking down on the harbour at Gibraltar

Gibraltar-based Elite Insurance has been placed in administration and has ceased playing claims, having initially ceased writing business and entering runoff in July 2017.

Responsibility for paying claims has now passed to the Financial Services Compensation Scheme, which has stepped in to protect the majority of Elite policies sold to UK individuals and small businesses.

The FSCS is working with the Gibraltar Financial Services Commission and Elite’s administrator PWC to assess the impact of Elite’s collapse.

Jimmy Barber, chief operating officer at the FSCS, said: “We are still in the process of identifying how many UK customers are affected by the failure of Elite Insurance.

“The FSCS will protect most UK-based customers of Elite who are individuals or small businesses with an annual turnover of less than £1m.

“We are working closely with the liquidators to make sure that all eligible policyholders affected by the failure of Elite are protected accordingly.”

Elite provided a range of products to the UK retail and commercial markets through a network of managing general agents.

These included motor insurance, after-the-event cover, vehicle guaranteed asset protection cover, solicitors’ professional indemnity insurance, latent/structural defect warranties and pet insurance.

Claims-handling functions will continue to be managed by Armour Risk Management, which bought the Gibraltarian firm in February 2018.

In June, Elite proposed a solvent scheme of arrangement to settle claims in order to avoid a liquidator being appointed.

It argued at the time that appointing a liquidator would incur costs that “would deplete assets that would otherwise be available to pay claims.”

Elite ceased writing new business with immediate effect in July 2017, after falling £9.7m short of its solvency capital requirement in the year to 31 March 2017 despite efforts to strengthen reserves.

It had been assigned a BBB- rating by Fitch in December 2016, having previously been unrated.

Its CEO Jason Smart said at the time that it was “confident” that it would be able to “conduct an orderly runoff.”

It later emerged that Elite had taken legal action against the GFSC, which had directed the insurer to cease writing new business and inject capital after identifying risks in 2016.

The firm also had ties to failed reinsurer CBL Insurance, which provided the lion’s share of Elite’s reinsurance and the failure of which was in turn blamed for the collapse of Danish unrated insurer Alpha last year.

Mapfre boss calls for climate change action

By Emmanuel Kenning | News | 11 December 2019

Mapfre chairman and CEO, Antonio Huertas, has urged insurers, governments, international organisations, the private sector, academia and civil society to deliver a combined approach to meet the challenge of climate change.

The call for action came as Huertas opened the Insu Resilience Global Partnership Forum, part of the United Nations COP25 Climate Change event in Madrid.

Mapfre highlighted that less than 20% of catastrophic damage in Latin America is currently covered by insurance adding that flood coverage is even lower at 10%.

During his keynote address Huertas said: “Climate change is real, and it is having an increasing impact on people’s lives.”

According to Huertas it is crucial for Latin American governments to better recognise the role and benefits of insurance as an efficient tool to protect and compensate for this type of catastrophic risk.

“Latin America could benefit more from insurance to better protect its societies from climate change,” he argued.

“Climate risk coverage helps people affected by extreme climate events to reduce their vulnerability and better manage their resources.”

Mapfre detailed that Insu Resilience Global Partnership is a public-private initiative created in 2017 together with the support of the G-20.

It designed to help develop climate risk cover for vulnerable people in developing countries.