UK-based Novae Group, set to be acquired by specialty lines insurer Axis Capital, has reported a pre-tax loss of £14 million ($23 million) for the first half.

The result compares with a profit of £65.3 million ($107.4 million) in the corresponding period last year, restated for changes including a new divisional structure.

“Our strategy since 2015 has been to re-engineer our underwriting portfolio in the face of a deteriorating soft market, which has tested even the largest industry players, and our result for [the half] should be seen in that context,” CEO Matthew Fosh said.

The Axis deal will allow Novae to continue its strategy as part of a much larger group, the company says. The transaction is expected to close in the fourth quarter after shareholder meetings this month.

First-half gross written premium grew to £598.8 million ($984.7 million) from £513.1 million ($843.8 million), while the combined operating ratio deteriorated to 101.6% from a restated 95.7%.

Outwards reinsurance spending increased to £247.7 million ($407.3 million) from £158.7 million  ($261 million).

The group says it benefitted from a lack of significant catastrophe and large loss events in the half, with notable losses including the Abu Dhabi National Oil Company refinery fire and Cyclone Debbie.