R&Q snaps up Global US from AXA for $80.5m

Insurance services and investment company Randall & Quilter Investment Holdings (R&Q) has revealed two new legacy deals including a US-based subsidiary of AXA Group.

The company is acquiring Global US Holdings Incorporated from AXA DBIO, SCA, a subsidiary of investment funds managed by AXA Liabilities Managers (AXA LM). Global US is the parent of Global Reinsurance Corporation of America (Global Re US), a New York domiciled insurance company in run-off that underwrote predominantly property and casualty pro-rata treaties and facultative business for regional and specialty insurance companies on non-standard automobile, multi-peril and general liability lines in the US. In August 2002, it went into run-off and was acquired by an investment vehicle managed by AXA LM in June 2014.

R&Q will acquire Global Re US for a consideration of approximately $80.5 million in cash.

As at Dec. 31, 2017, Global Re US reported total assets of $260 million, gross reserves of $146 million and $107 million of shareholders’ equity. In the year to December 2017, it made a profit of $15million after tax. During 2018, the company has distributed $25 million of its shareholder’s equity to an investment vehicle managed by AXA LM and has reported a small trading profit.

“R&Q is delighted to agree terms to acquire GLOBAL U.S. Holdings Incorporated,” said R&Q CEO Ken Randall. “We are very experienced in managing portfolios of this nature which reflects our expertise in managing long-tail US liabilities,” Randall added.

In a separate transaction, R&Q has announced that its wholly owned subsidiary Accredited Insurance (Europe) will acquire the entire issued share capital of MPS Risk Solutions (MPSRS) from its owners The Medical Protection Society (MPS).

MPSRS was formed in January 2004 as a UK authorised insurer subsidiary of MPS, and ceased active underwriting in October 2012. The residual liabilities comprise primarily professional liability exposures arising in the UK.

MPSRS had gross claim reserves as at Dec. 31, 2017 amounting to £2.4 million. The consideration payable by R&Q, in cash from existing resources, is £16 million. This represents a small discount to the company’s net assets of £17.8 million. In the year to Dec. 31, 2017 MPSRS recorded a profit before tax of £2.3 million.

“R&Q takes pride in assisting companies to dispose of companies in run-off and providing finality for the owners,” Randall said. “We expect to announce a number of additional acquisitions before year-end,” he noted.

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