14th May 2014 11:28
LONDON (Alliance News) - Specialist Lloyd's of London insurer Novae Group PLC Wednesday said first-quarter gross written premium increased by 6%, with Chief Executive Matthew Fosh heralding a "solid start" to the financial year.
In a statement, Novae said gross written premium rose to GBP195.1 million in the three months ended March 31, compared with GBP184.6 million in the corresponding quarter a year earlier. The increase was driven by the property line, where gross written premium increased by 18% to GBP89.6 million, offsetting a 13% fall in the casualty line, where gross written premium amounted to GBP40.7 million. Novae said the rise within the property division came about as it focused on the UK and US property insurance units, where pricing remains attractive, according to the insurer. Casualty exposure was reduced in response to softening rates.
The marine, aviation and political risk division saw gross written premium increase to GBP64.8 million, from GBP62.1 million.
Rates on renewal business for the year to March 31 were down 2.5% across the whole account as "positive risk selection" mitigated the impact of a generally softening market environment, Novae said, adding that the influx of new capital and consecutive benign years for catastrophe losses led to an anticipated reduction in rates for property catastrophe reinsurance.
On a risk adjusted basis, rates fell between 5% and 15%, with the most severe impact felt on US property treaty, Novae said, while rates continued to improve in the US property insurance, up 2%, and UK general liability insurance, up 4%, portfolios. Most other classes were generally flat to slightly down.
Novae said it has exposures to losses associated with the Malaysian Airline Flight 370 and the Sewol Korean Ferry tragedies, and anticipates net losses to be within "normal" risk appetite. Claims arising from catastrophe events were limited, with some exposure to UK flood and storm losses.
Overall claims experience for the quarter was in line with expectations, Novae said.
Investment return was flat at 0.4% on average assets, with Novae maintaining its full-year target of around 1.0%. Novae said it continued to allocate investment assets away from government debt instruments towards corporate and similar debt, while maintaining its defensive position towards rising interest rates.
"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," Fosh said in a statement.
Novae shares were Wednesday quoted at 579.00 pence, up 2.7%.
By Samuel Agini; [email protected]; @samuelagini
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