Lloyd’s insurance group Novae has announced its exit from some business segments, shutting down its casualty division to rebalance its portfolio and focus on more profitable classes.
In its first quarter financial report, Novae said that the transition of its portfolio to focus on classes where it retains a “demonstrable competitive advantage” was completed in the first part of the year.
The specialist insurer has withdrawn from four casualty classes – financial institutions, professional indemnity, general liability reinsurance and motor reinsurance. The outlook for future profitability was deemed inadequate in these segments, the company said.
As part of the operational changes, Novae’s cyber and US XS casualty units will be reported as part of an expanded marine, aviation, political risk and specialty division.
The UK general liability and medical malpractice units will be reported as part of the property division, offering specialist property and casualty package products.
All these changes have resulted in the closure of the casualty division, Novae said.
“We have completed the underwriting transformation of Novae into a focused Lloyd’s business, which has included the withdrawal from certain casualty classes where we deem future profitability to be unsustainable,” said group chief executive Matthew Fosh.
For the first quarter, Novae reported gross written premium of £354.9 million, up by 13.8% from £282.8 million last year. Claims performance across core lines was broadly in line with expectations.
According to Novae, it is unlikely to achieve a combined ratio below 100% for 2017 since the classes exited or in run-off are expected negatively to impact performance.
“The soft market, several years in the making, is now entrenched, and combined ratios above 100% will be commonplace,” Fosh said.
“Establishing a point of differentiation in today’s market is critical – the Group’s strategy over the past three years has been to pursue that goal.”
Related stories:
Former Europe CEO joins London insurer
.jpg)
