R&Q's operating profit up 30% in H1 despite COVID-19 induced slowdown

Randall & Quilter (R&Q) enjoyed strong growth across both its programme and legacy businesses in the first half of the year, despite COVID-19 reducing total investment returns and delaying deal completion.

The specialist non-life legacy insurance investor reported a pre-tax operating profit of £10.4 million in the first six months of 2020, a 30 percent increase on the £8 million generated in the same period of 2019.

The programme management business saw gross written premium increase by 42.6 percent to $247.2 million, from the $173.4 million reported in the six month period to June 2019. The company added ten new programmes in H1, taking the total number of active programmes to 36 at the end of June.

The legacy business saw its net reserves acquired increase by 81 percent to £267 million, from £148 million in H1 2019, with nine transactions completed across seven jurisdictions.

This generated an operating return on tangible capital of 17.7 percent, up from 14.1 percent in the same period the previous year.

R&Q noted that it had raised $100 million of new equity in the period, strengthening its capital base and increasing its group solvency ratio to 191 percent.

The company predicted that fiscal year 2020 results will be in line with market expectations.

"Despite unprecedented challenges introduced by COVID-19, we have had minimal disruptions to our operations," said Ken Randall, Alan Quilter and William Spiegel in a joint statement.

"We are excited by the opportunities available to us in the current market. COVID-19 and other market events have generated significant losses for the insurance industry, creating a 'hardening' insurance environment and increasing the demand for our Legacy and Program Management solutions.

"We have a strong balance sheet, expertise, relationships and the track-record to capture the additional growth in front of us. However, as is our tradition, we will be patient and disciplined as we continue to grow our business.”