NEWS RELEASE


11 November
2009


                           Novae Group plc

                    Interim Management Statement

  Novae Group plc ("Novae" or "the Group") today releases its second
interim management statement for 2009.  This covers underwriting and
investment performance for the first nine months of 2009, the Group's
business review for the ten month period ended 31 October 2009 and
its outlook for 2009 as a whole.

Group highlights

*         Group gross written premium for the nine months of 2009:
  £308.2 million, up 15.1% (Q1-Q3 2008: £267.8 million)

*         Rate increases averaged 9% for the first nine months of
  2009 (Q1-Q3 2008: 7% reduction)

*          Investment return during the first nine months of 2009:
  £26.5 million (Q1-Q3 2008: £32.0 million).  This equates to an
  annualised return on average invested assets of 3.34% (Q1-Q3 2008
  annualised return: 4.44%)

*         A more benign claims experience in the three months to 30
  September 2009 compared to the first half of the year

*         Novae's bank facilities increased and extended

Commenting today, Group Chief Executive Matthew Fosh said: "If the
steady improvements enjoyed during the third quarter are maintained
for the remainder of the year, we can counter the disappointments of
the first halfthe first half.  We are in positive rating territory at
a time when the Group's income base is building and diversifying."

Underwriting

In the first nine months of the year the Group wrote £308.2 million
of premium income (including acquisition costs) (Q1-Q3 2008: £267.8
million).  This represents around 74% of the planned income for the
year (Q1-Q3 2008: 76% of planned income).  Of the total, £262.1
million or 85% was written by the Lloyd's business and £46.1 million
or 15% by NICL (Q1-Q3 2008: £222.9 million/83% and £45.8 million/17%
respectively).

  Across all segments, rate increases in the first nine months of the
year averaged 9%, although significant variation between classes
remains.  This is towards the higher end of the Board's expectation
of a 5%-10% increase overall for the year as a whole.

In classes such as credit and financial institutions actual or
perceived vulnerability to claims experience is driving up rates
strongly.  The effect of 2008 windstorm losses continues to underpin
rate strength in property reinsurance and certain direct classes such
as US property.  This is also true of energy business although rate
increases are partially offset by the reduced amount of cover being
bought.  Aviation reinsurance business, much of which renews in the
fourth quarter, looks as though it will benefit from rate increases
given significant loss activity earlier in 2009.

For other classes the market's refusal to recognise potential claims
experience and low interest rates is holding back rating.  This is
particularly true of liability classes other than financial
institutions business.

Across the Group as a whole underwriting experience has improved in
the third quarter compared to the position at the interim stage.
Novae's aviation reinsurance unit has experienced a more normal level
of claims activity and measures taken within the CIFS, the UK trade
credit business, are delivering positive results.

The Specialty business, the largest of Novae's four reporting
segments, retains its cautious stance given uncertain economic
conditions.  Nevertheless areas such as financial institutions and
professional indemnity continue to trade profitably.  CIFS traded
around breakeven in the third quarter.  The emerging market credit
unit remains under pressure from individual loss events stemming from
global recession.  NICL's Specialty business compares well with
2008.

Within the Liability segment Novae continues to be defensively
positioned given recession in most of its key geographic markets but
performance nevertheless remains satisfactory.  There is a favourable
year-on-year comparison in NICL and the profitability of the marine
liability unit remains strong.

There has been a pronounced improvement in the Property segment in
the third quarter compared with the same period in 2008 as a result
of the absence of US windstorm losses this year.  At the nine month
stage the Property segment shows a healthy level of profit, dominated
by an impressive performance on property catastrophe reinsurance
business.

The performance of the Aviation & Marine segment for the first nine
months continues to be dominated by aviation reinsurance losses from
the first half.  While the aviation reinsurance unit made a profit in
the third quarter it is still substantially loss-making at the nine
month stage this year, in contrast to the situation in 2008 when it
was the largest source of profit for this segment.

The level of underwriting profit at the nine month stage represents a
pronounced improvement, consistent with the Board's expectations at
the time, upon the situation reported at the interim stage.  As far
as syndicate forecasts are concerned, changes to the public ranges at
the third quarter stage carry no implication for any impact on the
quantum of Group profit.  NICL does not publish forecasts for its
results but experience in the third quarter is consistent with
expectations for the year as a whole.

Novae Re

On 20 August 2009 the Group announced the formation of Novae Re, a
new unit underwriting an international and predominantly reinsurance
account.

  Nine senior underwriters have so far been appointed in London and
Zurich.  The new unit is expected to commence underwriting in time to
participate in the 1 January 2010 renewal season.  The Board has
noted positive feedback from industry sources, including Monte Carlo
in September and Baden Baden in October, which is encouraging.  Novae
Re expects to write between £90-100 million of gross written premium
in 2010.

As previously reported, the cost of Novae Re is not expected to
exceed £3 million in 2009 and £7 million in 2010.

Banking

On 1 October 2009 the Group renewed its bank facilities in the light
of the formation of Novae Re.

Its existing facilities were restructured into a £30 million letter
of credit available for the 2010 Lloyd's year of account and a £15
million revolving credit component extended until December 2011.  The
entire facility is provided by Lloyds TSB.

In the light of these re-structured facilities the Board currently
expects the Group's financing charge in 2009 to be around £1 million,
after taking credit for the £7.7 million gain on the repurchase for
cancellation of 2017 notes; and some £10 million for 2010.

Investments

The Group's investment strategy remains focussed on preservation of
capital and, within that constraint, the achievement of a targeted
total return each financial year.  Investment guidelines were revised
in the first quarter to permit an increased weighting in short
duration corporate bonds.  The resulting re-balancing of the
portfolios was completed in the second quarter.

As at 30 September 2009 the Group had investment assets of £1,042.0
million, as follows:


+-------------------------------------------------------------------+
| Investment type                      | 30 September | 31 December |
|                                      |     2009     |    2008     |
|                                      |    (£'m)     |    (£'m)    |
|--------------------------------------+--------------+-------------|
|                                      |              |             |
|--------------------------------------+--------------+-------------|
| Cash                                 |    327.2     |    546.1    |
|--------------------------------------+--------------+-------------|
| Corporate and supranational issuers  |    319.2     |    82.6     |
|--------------------------------------+--------------+-------------|
| Government bonds and bills           |    178.4     |    167.0    |
|--------------------------------------+--------------+-------------|
| Government agencies                  |     78.8     |    42.0     |
|--------------------------------------+--------------+-------------|
| Lloyd's overseas deposits            |     78.7     |    76.4     |
|--------------------------------------+--------------+-------------|
| Certificates of deposit and floating |     59.7     |    186.7    |
| rate notes                           |              |             |
|--------------------------------------+--------------+-------------|
|                                      |              |             |
|--------------------------------------+--------------+-------------|
| Total                                |   1,042.0    |   1,100.8   |
+-------------------------------------------------------------------+


Investment return for the first three quarters was £26.5 million on
average investment assets of £1,056.9 million, equivalent to an
annualised return of 3.34% (Q1-Q3 2008:  £32.0 million, £962.7
million and 4.44% respectively).

Deferred tax

Under International Financial Reporting Standards, a deferred tax
asset should be recognised to the extent that it is probable that
future taxable profits will be available against which it can be
utilised.

As the Group's development and diversification continues, it has
become increasingly probable that these tax losses will be utilised.
As at 31 December 2009 Novae expects to recognise most, if not all,
of the £24.5 million deferred tax asset that was not recognised on
the Group's consolidated balance sheet asset as at 30 June 2009.
This will result in a tax credit on the income statement.

Outlook

A healthy level of profit in the third quarter has countered losses
on credit and aviation reinsurance business in the first half.
Although yields, particularly for short duration UK and US government
bonds, are significantly lower than a year ago, the investment
portfolio was re-positioned sufficiently early in the year to reduce
this headwind for 2009.

Looking to 2010 the Group expects to benefit from the increasing
diversification of its underwriting portfolio, particularly following
the formation of Novae Re.  This diversification of the business,
together with a higher loss tolerance (measured in terms of
Willingness To Lose), will improve return on equity assuming normal
loss experience.

Disclaimer

The financial information contained in this release is based on
unaudited management information.  Certain statements made in this
interim management statement 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.

For further information:

Matthew Fosh   -   Novae Group plc           020 7903 7300
Nick Miles          -   M:Communications      020 7920 2330

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