Perceptive Underwriting

Chairman’s Statement for 2016

I am pleased to report another strong set of financial results for the Nexus Group for the year ended 31st December 2015. 

The combined results for the Group can be summarised as follows;

Year ended 31 December   2015
£000
  2014
£000
  % change
Gross Written Premium (GWP)   69,710   56,020   +24%
Turnover   14,117   12,325   +15%
Earnings before interest, tax depreciation and amortisation (EBITDA)   3,017   2,625   +15%
Total Capital & Reserves   7,975   4,338   +84%

Nexus has been successful in many areas during the year, the highlights are as follows;

  • In August, Nexus acquired 100% of EBA Insurance Services Limited ("EBA"), the specialist European MGA and Lloyd's services provider. This acquisition will provide Nexus a European  infrastructure in London, France and Italy and an additional £25m of  profitable GWP in specialist niche products such as Surety, Bond, Latent Defect and Decennial Liability. EBA was founded in 1999 and has a rich pedigree of providing profitable business to its Underwriting partners.
  • In December, Nexus acquired 100% of Millstream Underwriting Limited ("Millstream"), the specialist Travel and Personal Accident MGA. The acquisition adds over 350,000 policyholders to our overall portfolio of clients and will also add over £15m of profitable GWP to the Group.
  • It is evident from the above acquisitions that significant time and effort was focused on Mergers and Acquisitions during the course of 2015. This was in part, made possible as a result  of the recruitment of Stuart Rouse as Group CFO and COO and Tim Coles as Group CEO during the course of the year. This has enabled me to focus on M&A and on our overall  strategy going forward. It is our strong belief that the acquisition of other MGA's, portfolios and teams with proven track records of  underwriting success will be central to our growth and development going forward.
  • During the course of the year, we were also successful in securing an additional £3m of investment from B.P.Marsh & Partners  Plc, taking their overall investment in Nexus to 13.48% at 31" December 2015. Significantly, on account of our improving performance, B.P.Marsh & Partners Plc attributed a value in excess of £35m for Nexus, we anticipate this improving substantially once the full annualised impact of our acquisitions is felt.
  • On that point, it is worth reflecting on what Nexus would have looked like on a pro-forma basis, if the acquisitions had been  fully included in our figures during the course of 2015: GWP would be in excess of £85m, Turnover would be c.f17m and  EBITDA greater than film. We can therefore look forward to 2016 with great confidence.
  • It is my view that we are the most successful international, independent speciality MGA. This is reflected in the receipt of £1.4m of profit commissions during the course of the year. As an Independent MGA, we live and die by our own underwriting results. We are therefore very proud to represent twenty Underwriting Partners from Lloyd's of London and the Company Market.
  • Also of note, is the establishment of Nexus Asia as a branch. This is an exciting juncture in our development and will provide us access to the fastest growing insurance market in the world.  I have every confidence that we will build a successful operation.
  • I am also delighted to welcome Jeremy Adams to the Board of Nexus as a Non Executive Director. Jeremy brings over 35 years of experience with him and has operated at the highest level in our industry.
  • 2015 has been another transformational year for Nexus. At 31' December 2015, we are now a Group with over 100 employees in 4 countries (UK, France, Italy and Hong Kong) underwriting a vast array of specialty underwriting products for our underwriting partners. All of which has been achieved without any external borrowing, and has created a business valued greater than £35m, with an £8.0m Net Asset Value and £1.8m of free cash. Despite a highly competitive trading environment our employees have performed at the highest level, this is evidenced by the fact that 2015 was another year of record performance.

On behalf of the Board, I would like to thank the staff for their hard work, determination and contribution. The quality of our people and the commitment of our underwriting partners provides confidence that the Group will continue to develop profitable growth in 2016 and beyond.

 

Colin Thompson 
Executive Chairman

Registered Number: 07055303
                                                                                         


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