A £70.2m hit from catastrophe-related claims – arising from events such as the Japanese and New Zealand earthquakes and the Australian and Thailand floods – explains Lloyd's insurer Novae's loss-making 102 per cent combined ratio (of claims to premiums). Still, that's a big improvement on the first-half's heavily loss-making 111 per cent ratio.
Moreover, catastrophe losses are boosting premiums on related business lines as insurers rebuild their reserves. For example, and while Novae's premium rates were flat overall during 2011, property rates in both the group's insurance and reinsurance segments rose between 5 per cent and 10 per cent. But that process remains uneven – rates in Novae's marine and aviation reinsurance account, for example, slipped 2 per cent in 2011.
Meanwhile, the investment book delivered a 1.8 per cent return. That's not so bad given today's ultra-low interest rate environment and the book's highly conservative focus on cash and good quality bonds.
Numis Securities expects 2012 pre-tax profit of £31.5m and EPS of 37.3p.
NOVAE (NVA) | ||||
|---|---|---|---|---|
| ORD PRICE: | 363p | MARKET VALUE: | £234m | |
| TOUCH: | 360-366p | 12-MONTH HIGH: | 415p | LOW: 281p |
| DIVIDEND YIELD: | 5% | PE RATIO: | na | |
| NET ASSET VALUE: | 413p | COMBINED RATIO: | 101.5% | |
| Year to 31 Dec | Net premiums (£m) | Pre-tax profit (£m) | Investment income (£m) | Dividend per share (p)† |
|---|---|---|---|---|
| 2007 | 221 | 41.0 | 46.8 | 8.5 |
| 2008 | 258 | 40.2 | 50.0 | 11.3* |
| 2009 | 304 | 4.2 | 31.0 | 12.4 |
| 2010 | 431 | 35.1 | 25.4 | 15.7 |
| 2011 | 532 | -6.3 | 21.0 | 18.0 |
| % change | +23 | - | -17 | +15 |
Ex-div: 11 Apr Payment: 9 May Capacity owned: 100 per cent *Excludes 4.5p special dividend †Adjusted for December 2010's eight-for-nine share consolidation | ||||
