Novae Group plc today announces the formation of Novae Re, a new unit writing an international and predominantly reinsurance account. The new unit, which is made up of 12 senior, experienced underwriters and 8 actuarial and support staff, is led by Gunther Saacke, previously Head of Reinsurance at Endurance, the Bermudan (re)insurer.
The unit will write new business with effect from 1 January 2010 and will be integrated with the Group’s existing reinsurance business. Novae Re will offer a materially expanded range of reinsurance products, including specialist classes such as agriculture and engineering, which have traditionally not come to the London market.
These classes will further diversify the Group’s product range, and will shorten the tail of the Group’s book overall. In 2010 the unit is anticipated to write gross premium income of c. £100 million, and will be looking to grow the premium income thereafter subject to market conditions. In 2009 the incremental cost of the new unit, including establishment and other items, is not expected to exceed £3 million. For 2010 and subsequent years the annual core cost impact at a Group level is expected to be around £7 million.
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, today commented: “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.”
