Novae boss Matthew Fosh has defended recent changes to the specialist (re)insurer’s business structure after posting first half losses.

Novae reported a net loss attributable to shareholders of £24.9m, down from £10.8m profit at 30 June 2010.

But Fosh said despite the tough market conditions in 2011, the shift in business mix has been the right one. “The first half of 2011 has been a gruelling period for the non-life industry, not only due to the high incidence of catastrophe losses, but also due to a still soft rating environment in a number of classes, and to persistently low investment returns.”

“This combination has made for a tough first six months, during which it has been critical to focus not only on catastrophe classes, where rates are now responding, but also on those classes which, in the current environment, cannot deliver acceptable returns. We have closed or scaled back these classes.”

Gross written premiums for the period improved, up 19% to £286.8m from £241.9m in the first half of 2010.

Novae’s reported an unprofitable combined operating ratio of 111%, of which first half major catastrophe losses account for 20%. (H1 2010: 97%, major catastrophe losses 8%)