Novae reports premium rises

Novae Group has boosted Q1 premium income by 28% on the strength of 5% premium increases

Financial highlights (2008 in brackets)

• Group gross written premium £113.1m, up 28% (£88.5m)
• GWP in Q1 represents 30% of the planned income for the year (25%)
• £98.7m (£73.9m) written by the Lloyd's business and £14.4m (£14.6m) by NICL
• Rate increases averaged 5% (5% reduction)
• Investment return during the first quarter: £7.5m (£12.7m)

Chief executive Matthew Fosh said: "The year has begun well, with rates improving strongly in those classes linked either to the natural catastrophe events of 2008 or to the turmoil in financial markets. Other classes, though stabilising as expected, are yet to improve materially, in part because recession-related losses have not emerged. When they do we are well positioned to benefit from the rating environment that will follow."

Novae said : “Property business has seen widespread price increases, particularly on US risks. This has been repeated in the offshore energy market. Rates have also hardened in marine hull insurance business, although less sharply than in those classes directly affected by Hurricanes Gustav and Ike.

“In most areas of liability business rates generally have stopped falling. In financial institutions there is widespread evidence of rate hardening. Elsewhere, although rates have stopped falling they are yet to show any significant benefit from rate increases. Indeed, a small number of our competitors continue to cut rates in some instances to protect market share.

It also warned that claims resulting from the economic recession posed a risk.

It said the Hudson River, Buffalo, Fedex Tokyo and Butte aviation accidents will adversely affect its reinsurance unit in 2009.