Expansion helps boost Novae top line by 32%

Expansion helps boost Novae top line by 32%

Specialist Lloyd's insurer Novae has reported like-for-like growth of 7% for Q1 2015, with gross written premiums reaching £257.6m, from £195.1m, equal to growth of 32.0%. The company said it had achieved "strong growth from new underwriting teams".

GWP in property for Q1 was up 49.4%, to £133.9m, while in Casualty the growth was 34.4%, to £54.7m. Only in Marine, Aviation & Political Risk (MAP) was growth more modest, with a 6.5% increase in GWP to £69.0m.

Currency movements boosted turnover by 4.5 percentage points.

There were price reductions in all three sections, by 2.2% in Property, by 1.7% in Casualty, and by 5.1% in MAP.

On Property, Novae said that the division continued to attract "significant new business opportunities in UK and US property insurance, where the rating environment remains stable".

Significant contributors to growth were the establishment of new underwriting units focused on international and US open market business, as well as international binding authority business.

2015_Novae_Property

In Casualty, Novae said that the Cyber unit, established last year, continued to make good progress. Casualty also saw growth in reinsurance classes, where Novae said that it had found pricing to be more favourable than had been anticipated.

Novae reduced its exposures to international liability, and the division stopped underwriting motor insurance in the quarter.

2015_Q1_Novae_Casualty

In MAP, Novae said that it continued to grow "in targeted specialty classes", notably marine & energy, and political risk. Novae reduced exposure where pricing was unattractive, particularly in certain classes of reinsurance.

2015_Q1_Novae_MAP

Pricing

Rates on renewal business were down 2.8% on average. A 2% fall in property was mainly the result of an 11% fall in reinsurance. In liability, Novae said that had observed increases of up to 5% in UK liability, "but rates on international liability and financial professional lines were down overall".

Offshore energy rates were off about 14% on average, while aviation reinsurance was mixed. Rates across credit and political lines were down 2% overall, which was a better performance than had been expected.

Claims

On the claims side, Novae said it had some exposure to the Germanwings plane crash, but this was within its normal risk appetite. Elsewhere the quarter had been benign.

Investment

Investment remained conservative, with a return of £3.3m on average assets throughout the quarter of £1.246bn. The corresponding figures for last year were £4.5m on £1.21bn.

Novae group CEO Matthew Fosh said that the company would "continue to identify opportunities for further profitable growth without compromising underwriting discipline and we remain positive about prospects for the Group".

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