New hires and units drive Q1 growth at Novae
Novae Group, the specialist Lloyd’s insurance group, enjoyed a big increase in its gross written premiums (GWP) in the first quarter boosted largely new hires and new property underwriting units focussed on international and US open market business.
Its GWP increased to £257.6 million in the quarter, a 32.0 percent increase compared with the £195.1 million it generated in the same quarter a year earlier.
The biggest growth came from its property division, which grew its GWP by 49.4% to £133.9 million. Novae said the division attracted significant new business opportunities in UK and US property insurance where the rating environment remains stable.
The establishment of new underwriting units focussed on international and US open market business and international binding authority business were also significant contributors to the division’s growth in the quarter.
GWP in the casualty division grew by 34.4% to £54.7 million. Its cyber unit established in 2014 continued to make good progress, the firm said. It also saw growth in reinsurance classes, where the rating environment was more favourable than anticipated, Novae said. Exposures to international liability were reduced and the division discontinued underwriting motor insurance in the quarter.
The company said that iinvestment in the business, including new underwriting hires in 2014, made a significant contribution to the growth achieved in the quarter. The reported gross written premium has also benefitted both from the strengthening of the US dollar against sterling and from Novae being the sole capital provider to Syndicate 2007 for the 2015 underwriting year of account.
Excluding the impact of these factors, underlying growth of 6.9% was achieved from the existing portfolio. Growth in gross written premium is expected to be weighted towards the first half of the year, the company said.
Matthew Fosh, group chief executive of Novae, said: “Novae has made a very strong start to 2015, achieving growth of 7 percent from our existing portfolio and excellent contributions from the investments we have made in underwriting talent. We continue to identify opportunities for further profitable growth without compromising underwriting discipline and we remain positive about the prospects for the Group.”
The company said rates on renewal business for the year to 31 March 2015 were down 2.8 percent across the whole account. Rates in the property division decreased by 2 percent overall as a result of notable reductions experienced in the property reinsurance units of up to 11 percent. Property insurance lines were broadly flat.
Modest increases of up to 5 percent are still being achieved on UK liability business, but rates on international liability and financial professional lines were down overall, the company said.
Rates on offshore energy decreased 14 percent on average and aviation reinsurance experienced rate movement of –5 percent to +5 percent across its portfolio. Rates across credit and political lines have performed better than expected, down 2 percent overall in the quarter.
