Novae’s decision to return to shareholders the trapped capital freed by transferring business to its Lloyd’s syndicate appears to have found favour with the market. Its shares are up 6% compared with a week ago.

More pleasing for shareholders is that the capital return is just one piece of a four-part plan to lift return on equity. Novae is also cutting its reinsurance spend incrementally in 2010, 2011 and 2012, and is looking at selling its 2002 and prior-year run-off book.

Other insurers’ attempts at pleasing shareholders seem to be paying off too. Zurich announced it was planning to cut $500m (£319m) in costs and ensure its combined ratio is 3%-4% better than rivals’. Its shares are up 0.8% this week.

But this could be a case of a rising tide lifting all boats. After taking a pounding because of sovereign debt concerns, most insurers have posted increases – Aviva’s being most notable.


Market indices Movers price 7-day Currency

FTSE 100 5,770.28 Aviva (£) 380.40 +5.96% Dollar 1.58

FTSE 250 11,151.35 Zurich (CHF) 230.30 +0.83% Euro 1.18

FTSE All-share 2,988.60 AXA (€) 11.66 +1.65% Yen 130.13