Gefion and Qudos sue Staveley Head - report

legal-court

Staveley Head denies the breach of duty and breach of contract accusations alongside claims firm Proximo.

Danish provider Gefion Insurance and collapsed unrated insurer Qudos Insurance have launched a lawsuit against Lloyd’s coverholder Staveley Head and claims management firm Proximo, reports Law360.

According to the article, Gefion and Qudos sued Staveley Head and Proximo in June, alleging breach of contract and breach of duty of care.

The insurers further said they have lost around £8.8m because of inefficiencies in the claims management process.

Defense
A spokesperson for Staveley Head told Insurance Age that the broker’s defence to the claim is due on 13 September.

“We can confirm that Staveley Head denies the claim in its entirety,” the spokesperson added.

“We do not otherwise propose to comment but seek to make clear that the contents are not accepted.”

Law360 reported that Proximo also denied the claims.

Insurance Age has reached out to Gefion for comment.

The case has been filed with the High Court of Justice of England and Wales.

Recapitalisation
Gefion is also in need of a recapitalisation, after the Danish Financial Supervisory Authority (DFSA) ordered the business to recalculate its solvency level in July.

Sister title Insurance Post has reported that an update on the recapitalisation is expected next week.

As a result of the recalculation Gefion’s solvency ratio fell to 86% as of 31 May, instead of the 130% the provider posted in its Solvency Report in June.

The insurer was forced to take action earlier this year, after its solvency ratio dropped to 72%.

Losses
In its financial results for 2018, the motor insurer posted losses and a fall in return of investments, but a growing gross written premium.

Later in July, the DFSA ordered the unrated provider not to increase its volumes of business.

According to its website, Gefion works with Bollington Underwriting, Pukka Insure, Staveley Head, Prestige, Euna, J&M, BCL/Cogent, Octane and Tansar in the UK.

Last December, The Financial Services Compensation Scheme (FSCS) confirmed that Qudos Insurance, also an unrated Danish insurer, was declared bankrupt on 20 December 2018.

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