Lloyd's managing agent Novae Syndicates is close to moving on from its troubled past with a promising 2006 financial performance.

Insurance analysts are optimistic that Novae will become a "lower risk company with a higher rating" in 2007 after it reduced the group's legacy business further.

Novae utilised just £5m of a £104m special provision - to cover multi-million pound losses from discontinued business in the final quarter of 2006. This compares to £21m in the same period of 2005, and £24m in 2004.

As a result of the smaller reserve deterioration of discontinued business lines, including liability reinsurance, healthcare and third party liability analysts are optimstic.

Meanwhile, Novae Synd-icates reported a 10.1% of capacity profit for 2004. This has led analysts to raise profit before tax forecasts for 2006 by £3m to £31.9m.