Specialty insurer Novae Group, which is set to be
acquired by AXIS Holdings, revealed this morning that it made a loss in the first half of 2017 and says it will scrap interim dividends.
The Group announced a loss before tax of £14.0 million for the period ending June 30 this year, compared to a pre-tax profit of £65.3 million for the same period last year. While gross written premium rose to £598.8 million, compared to £513.1 million in 2016, net written premium fell to £351.1 million from £354.4 million.
Underwriting operations for the period took a hit, with its combined ratio coming in at 101.6%, up from 95.7% in the same period last year. Weighted average rates on renewal premium reduced by 1.8%, compared to a 3.9% reduction in the first half of 2016.
In the face of the results, Novae said its board had not recommended the payment of an interim dividend.
Chief executive Matthew Fosh said the firm’s strategy since 2015 had been to re-engineer its underwriting portfolio in the face of a “deteriorating soft market,” which he said had tested even the largest industry players, adding that Novae’s first half results should be seen in that context.
“It has only been by Novae focusing on niche classes where it could demonstrate a sustainable competitive advantage that the long-term prospects of the business could best be served,” Fosh commented in a release.
Last month it was revealed that
AXIS Capital had closed a deal to acquire the group for $604million, a move which is expected to complete by the end of the year. Speaking of the deal, Fosh said today that Novae’s specialist underwriting expertise is “highly complementary with AXIS’ own successful specialty franchise and has resulted in their offer to acquire the business.”
He went on to say that the proposed transaction would provide Novae “with the increased scale and financial resources to better compete in current markets.”
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