3 August 2016 Insurance

Investment returns buoy Novae to record H1 performance

Novae Group’s pre-tax profits soared in the first half of 2016 to reach record levels for the company in the first half of a year boosted by solid investment returns as a new investment strategy paid dividends.

Novae's pre-tax profits reached £37.9 million for the first half of 2016, a 30.7 percent increase and a record performance, compared with the £29 million it made in the first half of 2015.

Its net investment income for the period was £28.4 million, a big increase on the £3.8 million it made a year earlier, which it said was thanks to the implementation of a new investment strategy in the second half of 2015.

Many parts of the business also enjoyed substantial growth despite continued rate reductions which averaged a 3.9 percent decline on renewal business.

Novae reported gross written premiums of £513.1 million in the first half, a 10.8 percent increase on the £463.1 million of business it wrote in the same period in 2015.

Specifically, the GWP for Novae's property division was £258.1 million, a 7.1 percent increase from £231.5 million for the previous year.

Novae attributed this increase to a strategic partnership with Securis Investment Partners, with Special Purpose Syndicate 6129 making a significant contribution to growth in the first half of the year.

Its casualty division grew by 4.8 percent in the first half with GWP of £107.7 million, compared with £100.1 million for 2015. The company attributed a significant portion of the growth to the introduction of a US excess casualty unit.

Its marine, aviation and political risk division grew 6.2 percent to £147.3 million from £131.5 million for the same period in 2015.

While the marine and political risk classes saw growth, it was offset by reductions in aviation reinsurance, which Novae said was adversely impacted by the consolidation of reinsurance buyers.

Novae's combined ratio for the first half of 2016 was 96.1 percent, an increase of 6.3 percentage points from the same period in 2015.

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