R&Q has sold its Lloyd’s managing agency, R&Q Managing Agency (RQMA) to Coverys, a leading provider of medical professional liability insurance based in Boston, Massachusetts, after receipt of regulatory approval.
Coverys purchased RQMA for $22.6 million; after costs and related incentive and other payments, R&Q will get net proceeds of £13.1 million.
This is expected to generate a gain of approximately £11.8 million over the Group’s carrying value of RQMA – which will be renamed as Coverys Managing Agency.
Ken Randall, R&Q chairman and CEO, said the transaction is a key element of the firms strategy “to focus on legacy acquisitions and the writing of quality program business,which is mostly reinsured to highly rated reinsurers.
“We have already demonstrated how Coverys and R&Q are able to continue working together through the approval process of turnkey Syndicate 1975 and the ongoing management of the run-off Syndicate 1110.
“We remain an active participant as regards legacy portfolios at Lloyd’s and have a pipeline of further opportunities which we hope enhance our collaboration with Coverys,” he added.
RQMA is currently the managing agent for three syndicates: syndicate 1991 writes niche Small Medium Enterprise property and casualty business with a capacity of £127 million.
Syndicate 3330 provides reinsurance-to-close and other reinsurance solutions for legacy business within Lloyd’s.
Since October 2017, Syndicate 1110 the former ProSight syndicate which was placed into run-off in 2017 was added to RQMA’s portfolio.
R&Q also acquired ProSight’s corporate members and participates on 100% of Syndicate 1110’s open years.
In addition, RQMA provides back office support to Syndicate 2088; the syndicate managed by XL Catlin and backed by China Re.
Gregg Hanson, CEO and President of Coverys, said; “Through the acquisition, Coverys will inherit the continued responsibility to support the syndicates currently under management with RQMA. The acquisition additionally allows Coverys to assist new underwriting syndicates that seek to launch their business at Lloyd’s, while also maintaining business operations for existing syndicates.
“We are excited to enter the London marketplace and will look to RQMA’s industry knowledge and expertise to guide us in this prestigious market.”
R&Q has the benefit of substantial adverse development reinsurance from a ProSight group company.
Coverys has also gained in-principle approval from Lloyd’s to establish Syndicate 1975 which will be managed by RQMA.