London-based re/insurer Novae Group plc has continued to experience strong growth in excess & surplus lines property insurance, supported by third-party capital delivered through special purpose Lloyd’s of London syndicate 6129, which it launched in partnership with ILS investment manager Securis Investment Partners.
The special purpose arrangement between Novae and Securis is a way to bring alternative capital efficiently into the Lloyd’s market, supporting Novae’s underwriting capacity while delivering access to the returns of E&S property business to Securis and its investors.
Insurance and reinsurance investment fund manager Securis benefits from this access to an insurance focused specialty property market through the arrangement, and also benefits from the Lloyd’s platform, the security of Novae and the Lloyd’s central fund.
The special purpose syndicate 6129 has been helping Novae to grow in the specialty U.S. property insurance marketplace, while leveraging efficient capital from institutional sources. This growth has continued and in the first-quarter of 2017 Novae has reported premium growth in its property business of 25.6%.
That strong growth has been put down largely to expansion in E&S insurance markets, which is supported by Securis’ capacity and the special purpose arrangement between the pair.
The company explained in its results today that; “Premium growth was achieved across all divisions, particularly in those classes which benefitted from the investment in new underwriting teams and from initiatives the Group has taken over the last three years.”
However, it is the specialty property arena that is driving the majority of the premium growth at Novae.
“The most significant area of growth was in US Excess and Surplus lines, supported by the Group’s Special Purpose Arrangement with Securis Investment Partners LLP,” the company continued.
The Lloyd’s arrangement is benefiting both parties, with Novae growing its book using an efficient source of capital, while Securis is able to back the underwritten E&S portfolio with its investor capital, extracting a source of reinsurance linked returns.
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