Rate hikes averaged 2% this year
Lloyd’s insurer Novae wrote £473.3m of gross premium in the first nine months of 2010, up 54% on the £308.2m it wrote in the same period last year. This represents 82% of the planned gross written premium for the year.
Third-quarter 2010 gross written premium was up £165.1m on the same quarter last year. Novae attributed £117m of this to two new teams: Novae Re, which accounted for £92.9m, and the European property and personal accident team, which accounted for £24.1 million.
The motor unit formed in 2008 contributed a further £20.6m, while the remaining £27.5m of increase is spread across the group.
Novae achieved average rate increases of 2% for the year to date, compared with 9% for the same period last year. The company said there had been considerable variation in rate action by class. There were increases in classes such as motor, financial institutions, political and credit which have seen significant recent and high profile claims activity. Elsewhere, rates are flat or lower.
In terms of losses, Novae said the three earthquakes this year – Chile, Haiti and New Zealand – had collectively cost the company $15m net of reinsurance, while the net cost of the Transocean oil rig loss is less than $10m. The other major natural catastrophes so far this year have not had a significant individual impact, the company said.
Novae reported that its efforts to improve return on equity were on track. It has completed the transfer of liabilities from its UK insurance company, Novae Insurance Company Limited (NICL), to its Lloyd’s syndicate, thus freeing up capital within NICL. Novae intends to publish proposals for the return of surplus capital to shareholders in early December 2010, following the Lloyd's coming-into-line date of 29 November.
The company has also hit its 2010 target for reducing outwards reinsurance spend by £10m. It will increase this cut to £12.5m in 2011 and to £15m in 2012.
