Shares in Novae (NVA) rose more than 4 per cent after the Lloyd's insurer delivered a robust performance that saw gross premiums written up from £590m to a record £639m. Shareholders were rewarded with a special dividend payment of 20p a share, which, together with an increased final dividend, took the payout for the year to 44.8p, giving a yield of nearly 7 per cent.
Chief executive Matthew Fosh stressed the need for increased agility in a market where premium rates have continued to soften. And to this end, the company has been successful in identifying very niche areas, such as medical malpractice, in a move to exploit the higher margins on offer. Indeed, the claims ratio (of claims to premium income) fell from 52.4 per cent to 49.1 per cent.
And while the low interest rate environment continued, Novae managed to increase its investment return from £11.1m to £14.3m, lifting the average rate of return from 0.9 per cent to 1.2 per cent.
Analysts at Canaccord Genuity have raised their forecasts for the coming year to pre-tax profits of £47.7m and EPS of 65.4p (from £52.4m excluding foreign currency gains, and 78.2p).
