Novae Group plc: Pre Year-End Trading Update 8
Post# of 301275
8 December 2016 For immediate release
Novae Group plc
Pre Year-End Trading Update
Novae Group plc ("the Group"), the specialist Lloyd's insurance group, today releases a trading update. Preliminary results for the 12 months ending 31 December 2016 will be announced in March 2017.
Our trading experience in the second half has seen a continued prevalence of larger individual risk and catastrophe losses, as outlined at the half year and in the trading update for the period ended 30 September 2016. Whilst the attritional loss ratio remains steady despite rating pressures, the impact of larger individual risk losses means that underwriting contribution for the year is likely to be lower than our prior expectations. Our overall combined ratio for FY 2016, assuming normal trading for the remainder of December and including the accounting adjustment outlined below, is anticipated to be within a range of 98% to 100%.
Investment performance for the year to date remains strong. However, the recent significant bond market sell-off following the US elections has had a corresponding impact on our fixed income portfolio value.
In addition, following a pre year-end review of certain accounting policies, we have made changes to the accounting treatment of deferred acquisition costs. The impact of this review is expected to result in a write down of the deferred acquisition cost asset in the opening balance sheet by approximately £17m and an increase in the deferred acquisition cost charge for 2016, included in the anticipated combined ratio above, of approximately £5m. As this change in accounting treatment relates to non-cash items, it does not impact the Group's free cash flow.
This announcement contains inside information.
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For further information
Matthew Fosh/Reeken Patel : Novae Group plc 020 7050 9000
David Haggie : Haggie Partners 020 7562 4444
Disclaimer
The financial information contained in this release is based on unaudited management information. Certain statements made in this trading update are forward-looking. They are based on current expectations and are subject to a number of risks and uncertainties that could cause actual events, results or outcomes to differ materially from any expected future events, results or outcomes referred to in these forward-looking statements.
Note to editors
Novae is a diversified property and casualty (re)insurance business operating through Syndicate 2007 at Lloyd's and is listed on the London Stock Exchange. Established in 1986 Novae writes property, casualty and marine, aviation and political risk business between its offices in London and Bermuda.
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