Randall & Quilter Investment Holdings has released its results for 2020, showing a gross written premium (GWP) of $538.9 million, a 46% increase from $368.9 million in 2019.
The company also reported a Pre-Tax Operating Profit of £16.0 million, an increase of 102%, reflecting a year of accelerated growth across both business segments.
Its Profit Before Tax came to £30.2 million, a decrease of 21% from 2019, reflecting a reduction in net intangibles due to the mix of Legacy Insurance transactions
“2020 was a challenging year and the pandemic tested the resilience of our employees and our business model. Our team responded with agility and confidence in a dynamic market environment and this was demonstrated by our record 2020 operating results.
“I believe 2020 at R&Q can best be described as a year of accelerated growth. Our Legacy Insurance business reported its strongest year ever and our Program Management business, after just four years, became profitable. With both of our businesses profitable, we now have the foundation to continue accelerating our growth and delivering sustainable earnings in the years to come.
“We also added a complementary business to Program Management when we made a 35% investment in Tradesman Program Managers, one of our core MGA program management partners. This investment increases our exposure to fee-related profits and we anticipate exploring further opportunities to emulate this approach with other MGAs to whom we provide program management services.
“Very early in 2020 it was clear to us that the pandemic would result in significant structural changes to our markets, and that this would create highly attractive and accretive opportunities for R&Q. In order to execute on these, we raised £173 million ($225 million) of new capital, which we were able to deploy effectively in both the legacy and program markets.
“We remain in the enviable position of competing in growing markets that offer us the opportunity to reinvest our capital at high rates of return, creating long term shareholder value. With significant growth opportunities in front of us, our business will continue to consume capital over the near term, particularly our Legacy Insurance business. Over time, however, we expect our Program Management business to create enough free cash flow to make us capital self-sufficient.
“While we are in growth mode and remain capital consumptive, we are adopting a progressive cash dividend policy with a payout ratio of between 25% and 50% of our Pre-Tax Operating Profit, the best proxy for cash earnings. While the precise payout percentage may vary year on year, we intend to grow the total amount of the annual cash dividend from the FY 2020 level of 4 pence per share.
“This dividend policy will allow us the flexibility to carefully balance the allocation of our capital between reinvesting in profitable opportunities, providing an attractive and growing dividend to our shareholders and minimising the need to raise external capital.”
