11 May 2016 Insurance

Novae posts strong Q1 growth despite falling rates

Novae Group, a specialist Lloyd’s insurance group, posted a 9.8 percent increase in its gross written premiums (GWP) for the first quarter of 2016. The increased to £282.8 million, compared with £257.6 million in the first quarter of last year.

The firm’s GWP increased the most in its casualty sector (11.1 percent), followed by marine, aviation and political risk (MAP) (10.5 percent) and the property (8.9 percent).

Premium growth was achieved across all divisions, the company said, by capitalising on opportunities in lines of business where rates remain adequate and from the ongoing investment in new underwriting teams and initiatives. This was offset by reductions across poorer performing classes as the group continues to focus on improving the quality of its portfolio.

The insurer also said that Special Purpose Syndicate 6129, launched last year in conjunction with Securis Investment Partners, commencing operations on 1 January and was a significant contributor to growth in the quarter.

The company also stressed that, as it had anticipated, rates on renewal business continued to experience downwards pressure across most classes. The MAP division felt the most severe pressure, with energy rates down by 10 percent, it said.

Property reinsurance rates were down by 8 percent. Rates across property insurance classes experienced low single digit declines. The casualty division was least impacted with marginal reductions of 1 percent across the entire portfolio.

Claims experience is in line with expectations across the portfolio as a whole despite an increased prevalence of larger industry losses in the year to date. The attritional loss ratio continues to perform well despite the rating pressures as a result of the ongoing improvements in the group’s underwriting, said Novae.

Matthew Fosh, group chief executive, said: “Novae has made a promising start to the year. We continue to identify opportunities for further profitable growth without compromising underwriting discipline.

“The improvements we have made to the business in recent years leave us well positioned to deal with challenging markets and we remain positive about the prospects for the group.”

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