Novae restructures as 2013 profit rises 14%

Novae made a 2013 profit after tax of £31.6m, up 14% on the £27.7 it made in 2012.

The Lloyd’s insurer has also unveiled a new structure for 2013, under which the company will be organised around three trading divisions: property, casualty and marine, aviation & political (MAP).

‘Record’ underwriting profit

Novae’s 2013 results was bolstered by a record underwriting contribution of £48.9m, up 50% on 2012’s £32.6m. Novae chief executive Matthew Fosh described the increased underwriting performance as “an impressive result and the highest since I took over as chief executive at the end of 2002.”

The insurer’s combined operating ratio (COR) fell four percentage points to 86% (2012: 90%), in part thanks to a lower level of catastrophe claims

The improved result came despite a 3.5% reduction in gross written premium to £590.3m (2012: £612m, as planned cutbacks in the first half offset growth in the second, and a 57% drop in investment income to £11.1m (2012: £25.8m).

The improved result allowed Novae to pay a special dividend of 20p a share.

Fosh said: “I am delighted with our result for 2013, which for the third time in four years has produced a record underwriting performance and is testament to the discipline and judgment of our team.

“Maintaining this consistency of performance from a combination of specialist underwriting and sound capital management is central to our strategy.”

New structure

Before introducing its three new trading divisions, Novae had two units: insurance and reinsurance.

The company said: “This new divisional structure provides greater visibility around the performance of our major classes of business, it assists in the development of new sub-classes, it facilitates more efficient reinsurance buying, and it supports organic growth.”

It added: “Each trading division will be led by a senior member of Novae’s underwriting team, each of whom sit on our executive committee. Jonathan Butcher, our director of underwriting, will lead the casualty division. Ian Burford and Robert Forster, our joint active underwriters, will lead the property and MAP divisions respectively.”