5th Aug 2014 10:00
LONDON (Alliance News) - Novae Group PLC Tuesday said its first-half pretax profit crept up as a drop in revenue was more than offset by lower claims, but results were hurt by a swing to foreign exchange loss due to the strength of sterling.
Novae increased its interim dividend by 0.6 pence to 6.6p per share.
Shares were Tuesday quoted up 1.3% at 528.50p.
In a statement, the property and casualty insurer, which also underwrites marine, aviation and political risk, said it made a GBP21.3 million pretax profit in the six months ended June 30, compared with GBP21.1 million in the corresponding period last year.
Revenue net of premiums ceded to reinsurers decreased by 12% to GBP224.9 million due to a fall in net earned premium, though net investment income, which makes up about 3% of revenue, increased by GBP3.0 million to GBP7.4 million. Net claims incurred fell by 27% to GBP106.1 million. Novae also booked a GBP1.3 million net foreign exchange loss, compared with a gain of GBP9.3 million last year.
The insurer also said that US dollar-denominated business accounted for about 47% of gross written premium, up from 41% in the corresponding period last year. Operating expenses increased to GBP38.2 million from GBP33.7 million, driven by higher employment costs as a result of the improved underwriting performance in the year to date. Policy acquisition costs fell to GBP55.0 million from GBP60.2 million due to a change in business mix.
"Novae continues to deliver an improving performance despite a more challenging rating environment, low interest rates and a strong sterling. We continue to invest in the business, attracting talented people and developing new opportunities, leaving us well placed to build on the good progress we have made," Chief Executive Matthew Fosh said in a statement.
By Samuel Agini; [email protected]; @samuelagini
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