Insurance company will fold into Lloyd’s syndicate

Novae will fold Novae Insurance (NICL) into its Lloyd’s syndicates business to free up £60m of spare capital.

NICL's in-force policies, subject to regulatory and court approval, will either be transferred to the Group's Lloyd's business or run-off. This business transfer process is expected to be substantially complete during 2010.

Novae said these steps would potentially improve post-tax returns by up to 3%. It has set an objective for a post-tax cross cycle return on equity of 13-15%.

Reinsurance cut too

It also said its "Willingness To Lose" plan to reduce reinsurance bought would improve post-tax returns by 2%

Structural and organisational savings would add around 1% to post-tax returns by 2011, Novae claimed.

It said its as yet timescale-free search for a third to run off of the 2002 and prior underwriting would improve post-tax returns by up to 2%, subject to terms

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