Novae Group PLC Novae Group Plc : Trading Update For The Period Ended 30 September 2016

 
TIDMNVA 
 
 
 
 
 
 
   9 November 2016 For immediate release 
   Novae Group plc 
 
   Trading Update for the period ended 30 September 2016 
 
   Novae Group plc ("Novae" or "the Group"), the specialist Lloyd's 
insurance group, today releases its trading update for the period ended 
30 September 2016. 
 
   Overview 
 
 
   -- Gross written premium increased by 15.8% to GBP717.4 million (Q3 2015: 
      GBP619.5 million) 
 
   -- Rates on renewal business reduced by 3.2% across the whole account 
 
   -- Strong investment return for the first nine months of 2016: 3.0% (Q3 
      2015: 0.1%) 
 
   -- Continued prevalence of large individual and catastrophe loss events 
      impacting contribution from underwriting in H2 
 
 
   Commenting today, Chief Executive Officer Matthew Fosh said: 
 
   "Our trading experience during the first half of the year continued into 
the third quarter, with a higher incidence of larger individual risk and 
catastrophe losses partially offset by a strong investment performance. 
Our focus on disciplined underwriting remains, continually reshaping our 
portfolio to focus on those underwriting areas where we have a 
demonstrable competitive advantage." 
 
 
 
 
Gross written premium to 30 September 
(GBPmillions)                                         2016    2015    % change 
Property                                             360.1   296.4       21.5% 
Casualty                                             152.9   138.1       10.7% 
MAP                                                  204.4   185.0       10.5% 
Total                                                717.4   619.5       15.8% 
 
 
   Gross written premium for the nine months to 30 September 2016 was 
GBP717.4 million (Q3 2015: GBP619.5 million), an increase of 15.8% and 
9.0% at constant rates of exchange. 
 
   Premium growth was achieved across all divisions as the Group continues 
to invest in classes of business where rates remain favourable. This was 
offset by reduced premium from a number of poorer performing classes 
which were exited during the final quarter of 2015, including 
agriculture reinsurance and credit & surety reinsurance. Additionally, 
in the second half of 2016 the Group discontinued its international 
liability unit. 
 
   As previously reported, Special Purpose Syndicate 6129 has continued to 
be a significant contributor to the growth in the Property Division in 
the first nine months of the year. The Group's "Invest" classes of Cyber, 
UK Property, Political & Credit and Marine also found opportunities for 
profitable growth. 
 
   As expected, rates on renewal business continue to experience pressure 
across the majority of classes; down by 3.2% in aggregate for the period 
ended 30 September 2016. 
 
   The Marine, Aviation and Political Risk division has experienced the 
most significant rating pressure with energy, aviation reinsurance and 
marine reinsurance the most severely impacted. Property reinsurance 
rates have reduced by 5% over the period, although this represents a 
slightly improved position from earlier in the year.  Rates across 
property insurance classes experienced low single digit declines. 
Delegated authority lines that focus on homeowner and smaller commercial 
risks have generally avoided some of the more significant rate 
decreases. Cyber rates continue to exhibit increases, reflecting growth 
in product demand. 
 
   As reported at the half year, the Group is not immune to the increased 
prevalence of losses affecting the industry in 2016. For the year to 
date, Novae has experienced an increase in losses from natural 
catastrophes compared with 2015. There were also a number of large risk 
losses arising in the current accident year, including the Jubilee oil 
field loss, the SpaceX Amos 6 satellite loss, and two product recall 
events. The Group's full year result will also be impacted by Hurricane 
Matthew with current loss estimates between US $10 million and US $15 
million. 
 
   Investment return for the first nine months to 30 September 2016 was 
GBP39.9 million, on average assets of GBP1,325.9 million, equivalent to 
a pre-tax return of 3.0% (Q3 2015:  GBP0.7 million, on GBP1,216.0 
million and 0.1% respectively). The investment return benefitted from a 
strong performance in the fixed income portfolio, which aims to hedge 
the Group's interest rate exposure. The asset allocation and resulting 
investment risk remains in line with target appetite despite continued 
market volatility. 
 
   Disclaimer 
 
   The financial information contained in this release is based on 
unaudited management information.  Certain statements made in this 
trading update are forward-looking. They are based on current 
expectations and are subject to a number of risks and uncertainties that 
could cause actual events, results or outcomes to differ materially from 
any expected future events, results or outcomes referred to in these 
forward-looking statements. 
 
   For further information: 
 
   Matthew Fosh/Reeken Patel - Novae Group plc - 020 7050 9000 
 
   David Haggie/Rebecca Young - Haggie Partners - 020 7562 4444 
 
   This announcement is distributed by Nasdaq Corporate Solutions on behalf 
of Nasdaq Corporate Solutions clients. 
 
   The issuer of this announcement warrants that they are solely 
responsible for the content, accuracy and originality of the information 
contained therein. 
 
   Source: Novae Group plc via Globenewswire 
 
 
  http://www.novae.com/home.aspx 
 

(END) Dow Jones Newswires

November 09, 2016 02:00 ET (07:00 GMT)

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