Novae bows out with a loss

The half-year figures make pretty grim reading. The half-year dividend was scrapped, and with record surplus capital pouring into underwriting, softer premiums put further pressure on margins. Novae decided to stop doing business covering financial institutions, professional indemnity, motor reinsurance and general liability reinsurance. Downward pressure continued on premiums in most classes, with renewal rates falling by 1.8 per cent, although this was an improvement from the 3.9 per cent fall in last year's first half.

The loss-making combined ratio – of claims and expenses against income – of 101.6 reflected a severe deterioration in classes that the group has left or put in run-off. In the exited division, the combined ratio was 128.4, whereas in the property division, gross written premiums rose by 15 per cent at fixed exchange rates, and the combined ratio was a profitable 91.5 per cent. In the group’s cyber and US casualty, gross written premiums rose by 17.2 per cent at constant currencies, although the combined ratio deteriorated from 92.3 per cent to 98.7 per cent.