R&Q announces first half 2018 profit
Randall & Quilter Investment Holdings (R&Q) has announced that it made an operating profit of £7.8 million for the first half of 2018, an increase on the £7.5 million it made in the same period of 2017.
“I am delighted to report pre-tax profits for continuing operations in the first half of 2018 of £7.8 million, a 40 percent improvement over 2017,” said Ken Randall, group chairman and chief executive officer. “Following the disposals of our Lloyd’s Managing Agency and Insurance Services business in November 2017 and January 2018 respectively, our focus is now firmly on legacy and program management. Both activities have strong growth potential.”
According to Randall the proceeds from these disposals, together with the £47 million placing and open offer in November 2017 have been deployed.
He added: “As regards legacy, we are today announcing the acquisition of Global Re US, our largest legacy acquisition to date and have a number of further transactions, some of which are well advanced. Two weeks ago we announced the completion of our largest ever legacy reinsurance for a US Risk Retention Group with a premium of $108.5 million and a limit of $146 million. These transactions demonstrate that we are gaining traction in larger sized deals.”
According to Randall the disposing of legacy portfolios is viewed by the traditional insurance market as mainstream capital management and consequentially demand for run-off solutions is growing as owners and managers of non-life insurers carve out non-performing books of business and seek to achieve greater capital efficiency.
In program management, R&Q has restructured its activities in the USA and Europe under the Accredited brand and is seeing a high level of interest on both continents. Accredited USA is licensed to write admitted insurance business in all 50 states and Accredited Europe is licensed to underwrite in all European member states. Both companies are rated A- (Excellent) by AM Best credit rating agency and this distinguishes their offering from competitors, especially in Europe.
By year end, Randall said that R&Q expects to have secured contracts which will generate future gross written premiums in the region of $500 million per annum and that the company is making good progress towards increasing its average commission to 5 percent of GWP. According to Randall this rapid growth is being driven by R&Qs comprehensive licences, strong credit ratings and, in Europe, its ability to provide a credible Brexit Solution for UK insurers seeking continued access to EU insurance markets. However, Randall stressed that there is a natural time lag between securing the business, generating GWP and then earning the premiums and commissions.
Randall concluded: “Profitability in the second half of the year is expected to be strong, even though commission earnings from program business will not start to contribute in a meaningful way until 2019 and beyond.”
