Randall & Quilter benefits from simpler business model in H1

Randall & Quilter, the specialist non-life legacy insurance investor, posted a strong set of results for the first six months of 2017 as it benefitted from a robust pipeline of legacy business and the impact of simplifying the business, which has included some disposals.

The company made a net profit of £5.9 million in the first half, a big improvement on the £0.9 million it made in the same period in 2016. These results included a record contribution from legacy transactions completed of £19.1 million (2016: £2.7 million), of which £12.7m arose from premiums in excess of undiscounted reserves assumed and £6.4 million (2016: £2.7 million) from goodwill on bargain purchase, it said.

The company has made some important changes to its strategy this year, which it highlighted as helping its results. It noted that additional capital has been injected into R&Q Insurance Malta and Accredited, it has sold Lloyd’s managing agency Coverys for $22.6m, and it has sold Norwegian insurance manager Triton.

It also noted that the R&Q Re Bermuda, Accredited and R&Q Insurance Malta have all performed well driven primarily by legacy loss portfolio transfer activity and its MGA/programme business, both in the US using Accredited, and more recently, in the UK and EU, using R&Q Insurance Malta, have grown strongly.

The company stressed that the simplification of its business model remains a priority for the board. It noted that it has continued to rebalance its capital commitments to allow additional deployment in legacy transactions and to support its expansion in underwriting programme business, primarily on behalf of highly rated reinsurers. Agreements to dispose of certain non-core operations have already been announced and others are being actively worked on, with further progress expected before year end, it noted.

Ken Randall, chairman and chief executive officer, said: “I am pleased to report that the group delivered a very strong performance during the first half of the year. It is the board’s view, especially given the advanced state of a number of other legacy transactions and the growing pipeline that the results for the full year will be at least in line with expectations, absent unforeseen circumstances.

“The outlook for the Group beyond the current year remains very promising. In the period, we have continued to simplify the business and announced the disposals of our Lloyd’s Managing Agency business, subject to regulatory approval, as well as our insurance manager, Triton in Norway.

“We have established and developed high quality and fully licensed platforms in multiple regulatory jurisdictions while retaining our entrepreneurial and innovative culture. We have widened our distribution network of brokers with the recent fundraising increasing the attractiveness of R&Q Insurance Malta and Accredited.

“Our planned focus on legacy acquisitions and the use of Accredited and R&Q Insurance Malta as conduits for niche programme business to highly rated reinsurers looks increasingly well placed. There are good growth opportunities in both of these core operations and the Group’s strong and growing market position is being driven by our central tenets of expertise and innovation.”

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