Lloyd’s of London insurer Novae Group announced on Thursday that its underwriting profit for 2016 may not meet previous expectations due to increased losses.
The company said its trading experience in the second half of the year saw a continued prevalence of larger individual risk and catastrophe losses.
“While the attritional loss ratio remains steady despite rating pressures, the impact of larger individual risk losses means that underwriting contribution for the year is likely to be lower than our prior expectations,” Novae said in a trading update.
According to the specialist insurer, its overall combine ratio for 2016 is expected to be within a range of 98% to 100%.
Investment performance remains strong so far, Novae said, but the recent “significant” bond market sell-off following the US elections had affected the value of its fixed income portfolio.
Novae also announced changes in its accounting policies for deferred acquisition costs, which would result in a non-cash full-year writedown of about £17 million and an increased charge of about £5 million.
The insurer will release its preliminary results for this year in March 2017.
Related stories:
Novae reveals 15.8% rise in premiums
Charles Fry to leave Novae Group
