R&Q agrees to sell RQMA to Coverys
R&Q Investment Holdings has reached agreement to sell the entire share capital of its Lloyd's managing agency, R&Q Managing Agency (RQMA) to Coverys, a leading provider of medical professional liability insurance based in Boston, Massachusetts.
On completion, the agreement involves the cash payment by Coverys to R&Q of $22.6m, which after costs and related incentive payments, will result in estimated net proceeds to R&Q of £13.9m. This is expected to generate a gain of approximately £12.6m over the carrying cost of RQMA in the Group’s 2016 audited accounts. The profits attributable to RQMA in the last audited accounts as at 31/12/16 were £0.3m and the value of the RQMA related assets was £1.3m. In addition, the Group is expected to make cost savings in other parts of the Group which supported RQMA and these savings are likely to offset the loss of estimated RQMA related profit in 2018.
The sale remains subject to regulatory change of control approval by Lloyd’s and the PRA, anticipated to be received in late 2017.
The sale follows the previously announced decision to simplify the Group's operations to focus on its core, high growth activities which includes the acquisition/assumption of run-off portfolios and the use of its licensed companies in the US and EU as conduits for niche and profitable books of P&C business, primarily to highly rated reinsurers.
