3 April 2014 Insurance

Novae eyes acquisitions; restructures divisions

The chief executive of Novae Group, the re/insurer which operates predominantly through Lloyd’s syndicate 2007, has said the group is open to potential acquisitions in 2014 after posting solid 2013 results.

Matthew Fosh, group chief executive, said the company is now well positioned to benefit from several years of strategic re-positioning for the business. Last year, it established what it called the growth & efficiency programme to build on this momentum.

“Profitable organic growth is central to this strategy, but we will also consider acquisition opportunities where they accelerate and complement the achievement of our strategic aims,” he said.

When Fosh first joined Novae some 11 years ago, he spent several years fixing what was then a predominantly long-tail business that had suffered extensive losses from US liability classes.

From 2009, he started to reposition the business as a diversified property/casualty re/insurance business. He said now this change is complete, his focus is on further growth.

The business made a net profit of £31.6 million in 2013, a small increase on the £27.7 million it made the year before. Its gross written premium fell to £590.3 million in 2013 from £612 million in 2012 but the contribution of its underwriting to its overall profits increased substantially to £48.9 million compared with £32.6 million in 2012. Its combined ratio was 85.7 percent for the year compared with 90.5 percent in 2012.

The company also announced changes to its operating model going forward following a review of its governance and committee structure and of its underwriting operating model.

The results of this led to two changes. Firstly, it has streamlined the number of committees and sub-committees. Secondly, from 2014, its underwriting will be managed in three trading divisions, rather than two: property, casualty and a combined unit comprising marine, aviation & political. These will replace the current two units of insurance and reinsurance.

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