Novae swings from loss to profit in H1

Lloyd’s insurer Novae made a profit of £10.8m in the first half of 2010 compared with a loss of £10.5m in the same period last year. The first-half combined ratio improved to 100.8% from 110.5%.

Operating profit before foreign exchange movement on non-monetary items was £18.2m for the first half of 2010, compared with a loss of £5.1m in the first half of 2009. The profit includes reserve releases from 2007 and prior years of £11.1m.

Novae’s gross written premium increased to £333.4m in the first half of 2010 compared with £220.3m in the same period last year.

The group’s property/short-tail segment made a profit of £14.8m despite the losses seen in the first half of the year. This compares with a loss of £12.3m in the same period of 2009. The majority of the increase in premium income came from the firm’s property/short-tail segment, largely because of the formation of Novae Re, a new reinsurance division, in the second half of 2009. The firm said that elsewhere, it continues to take a disciplined approach to premium income growth.

Novae’s liability/long-tail segment made a profit of £8.8m, down from the £13.4m profit it made in last year’s first half.

"Novae has delivered a good result given a challenging marketplace for underwriting,” said Matthew Fosh, Novae’s CEO, in a statement. “Premium growth has been disciplined and focused in new areas of underwriting. The market experienced a significant number of major losses in the first half although rating in many areas remains weak. Nevertheless, we have had another strong period of investment return and remain on-track to deliver on the strategic priorities identified last December.”