R&Q in advanced talks to sell subsidiary

Bermuda-based R&Q Insurance Holdings has confirmed it is advanced discussions for the sale of its programme management business.

In a statement attributed to the board, R&Q said it was in talks with private equity firm Onex Corporation for the sale of Accredited.

Onex is a Toronto Stock Exchange-listed private equity investor which currently holds stakes in a number of insurance businesses, including Bermuda-based Convex. It is also an investor in Canadian airline WestJet.

R&Q, which is led by CEO William Spiegel, had previously stated that it was undergoing a review of the strategic options for the Group, which has included the legal separation of Accredited and R&Q Legacy.

The move is part of its efforts to set the business on a “more favourable footing” to deliver profitable growth as it transitions its legacy business to a fee-based and capital efficient model.

R&Q management highlighted that Accredited has witnessed substantial growth over the past three years, recording gross written premium and fee income (excluding minority stakes in MGAs) of $1.8 billion and $80 million, respectively, in 2022. Accredited now stands as one of the largest programme managers globally.

Overall, R&Q group also reported a $33.3 million pre-tax loss in 2022, as its legacy business recorded a one-time $32 million adverse development.

R&Q, which completed its separation into two legal entities and is exploring strategic possibilities with third parties, said the charge contributed to a $56.6 million loss of the legacy business.

In July, AM Best recognised Accredited as an independent ratings unit, distinct from R&Q. It affirmed the financial strength rating of A- of Accredited Specialty Insurance Company (ASI), Accredited Surety and Casualty Company, Inc. (ASC) and Accredited Insurance (Europe) Limited (AIEL), collectively known as Accredited.