Novae grows despite softening rates
Novae Group, the specialist Lloyd’s insurance group, enjoyed solid growth in the first three months of 2014 in what it described as a challenging rating environment as it targeted more speciality classes of business.
The company’s gross written premiums (GWP) increased by 6 percent to £195.1 million in the quarter compared with £184.6 million a year earlier. The bulk of the growth occurred in its property division, which grew by 18.1 percent to GWP of £89.6 million while its marine, aviation & political risk unit also posted growth of 4.3 percent with £64.8 million of GWP. Its casualty unit shrank by 12.7 percent to £40.7 million.
It said the growth of its property unit was focussed on areas where pricing remains attractive, namely the UK and US property insurance units. The division also participated for the first time in two material facility arrangements, which are complementary to the existing portfolio.
The decline of its casualty division was in response to the softening rate environment, it said.
Novae said the weighted average rates on renewal premium reduced by 2.4 percent with pressure especially prominent in property-catastrophe business but that positive risk selection mitigated the impact of a generally softening market environment.
“The influx of new capital and consecutive benign years for catastrophe losses led to the anticipated reduction in rates for property catastrophe reinsurance. On a risk adjusted basis, rates fell between 5 percent and 15 percent, with the most severe impact felt on US property treaty,” the company said.
It noted, however, that rates continued to improve in the US property insurance (+2 percent) and UK general liability insurance (+4 percent) portfolios. Most other classes were generally flat to slightly down.
Matthew Fosh, group chief executive of Novae, said: “Novae has made a solid start to the year, generating attractive new business opportunities within each of our trading divisions, despite a challenging rating environment. Our focus remains on the combination of specialist underwriting expertise and disciplined capital management and this will remain our priority throughout the remainder of the year.”
