20 August
2009


                           Novae Group plc

                        Formation of Novae Re

Novae Group plc ("Novae" or "the Group") today announces the
formation of Novae Re, a new unit writing an international and
predominantly reinsurance account.

The new unit, which is made up of 12 senior, experienced underwriters
and 8 actuarial and support staff, is led by Gunther Saacke,
previously Head of Reinsurance at Endurance, the Bermudan
(re)insurer. The unit will write new business with effect from 1
January 2010 and will be integrated with the Group's existing
reinsurance business. Novae Re will offer a materially expanded range
of reinsurance products, including specialist classes such as
agriculture and engineering, which have traditionally not come to the
London market. These classes will further diversify the Group's
product range, and will shorten the tail of the Group's book overall.
In 2010 the unit is anticipated to write gross premium income of c.
£100 million, and will be looking to grow the premium income
thereafter subject to market conditions.

In 2009 the incremental cost of the new unit, including establishment
and other items, is not expected to exceed £3 million. For 2010 and
subsequent years the annual core cost impact at a Group level is
expected to be around £7 million. The formation of the new unit
remains subject to FSA and Lloyd's approval. The Group expects to
fund Novae Re from a combination of existing Group resources and new
debt facilities.

Matthew Fosh, Novae's Chief Executive, today commented: "The
formation of Novae Re brings a combination of strategic benefits. It
diversifies our product range; it allows more efficient allocation of
capital and begins to utilise the surplus capital across the Group.
It also shortens the tail of our business overall."

Disclaimer

The financial information contained in this release is based on
unaudited management information.  Certain statements made in this
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 7153 1535

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