Novae posts H1 loss but cyber keeps growing

Novae Group, the specialty insurance group that recently recommended an offer from AXIS Capital, has announced its interim results for the six months ended 30 June 2017.

The Lloyd’s insurer posted a loss before tax of £14.0m, compared with a profit before tax of £65.3m for the same period in 2016.

Gross written premium was £598.8m, compared with £513.1m, and the combined ratio was 101.6%, compared with 95.7%, driven by reserve deterioration in classes that the group exited or placed in run-off during the past 12-18 months.

CEO Matthew Fosh said: “Our strategy since 2015 has been to re-engineer our underwriting portfolio in the face of a deteriorating soft market, which has tested even the largest industry players, and our result for H1 2017 should be seen in that context.”

Earlier this year, Novae completed its underwriting reorganisation with the announcement of its withdrawal from certain casualty classes and the closure of its casualty division.

The group has cut back and declined business where the rating environment renders the underwriting opportunity unattractive, it said in a trading statement. But some lines continued to achieve growth, notably in certain marine classes, credit business and cyber insurance.

Mr Fosh added that the proposed transaction with Axis Capital will provide increased scale and financial resources to better compete in current markets.