Novae Group PLC Novae Group Plc : Trading Update For The Period Ended 30 September 2016
09 November 2016 - 6:00PM
UK Regulatory
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)
Copyright (c) 2016 Dow Jones & Company, Inc.
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