New Lloyd’s reinsurer will write £100m of diverse business
Novae has formed a new unit writing £100m of international and predominantly reinsurance business called Novae Re.
The new unit is made up of 12 senior, experienced underwriters and eight actuarial and support staff. It is led by Gunther Saacke, previously head of reinsurance at Bermudan reinsurer Endurance.
The unit will write new business from 1 January.
Diversification
Novae Re will offer an expanded range of products, including specialist classes such as agriculture and engineering, which have traditionally not been written in the London market.
Novae said these classes will diversify the group's product range, and will shorten the tail of its book overall.
In 2010 the unit is anticipated to write gross premium income of £100m, and will be looking to grow the premium income subject to market conditions.
In 2009 the incremental cost of the new unit, including establishment and other items, is not expected to exceed £3m with annual costs of £7 million.
Subject to approval
The formation of the new unit remains subject to FSA and Lloyd's approval. The Group expects to fund Novae Re from a combination of existing Group resources and new debt facilities.
Matthew Fosh, Novae's chief executive, said: "The formation of Novae Re brings a combination of strategic benefits. It diversifies our product range; it allows more efficient allocation of capital and begins to utilise the surplus capital across the Group. It also shortens the tail of our business overall."
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