Non-life legacy insurance investor Randall & Quilter saw its profits surge 399% to £38.9 million in 2019.
At £40.1 million, R&Q’s pre-tax profit was a group record and almost three times the equivalent result in 2018.
The company says this was the result of continued growth in both its Program Management and Legacy businesses as the firm successfully executed against its strategy and capitalized on the significant opportunities in both segments.
R&Q’s 16 legacy transactions contributed £332.2 million of new cash and investments and £276.2 million of additional net reserves.
Moreover, the Legacy Operations team continued to achieve claims and reserve savings from portfolios acquired in prior years, while investments returned 3.6% on £832.2 million of Cash and Investments at year-end.
“Our investment portfolio continued to be conservatively managed and at year end 2019, we maintained a high quality (90% investment grade) and short average duration of 1.7 years,” the company said in a statement.
“In 2019, our Legacy business generated an Operating Return on Capital of 19.6% and over the past three years we are proud to report that our Operating Return on Capital has averaged 17.6%.
“We believe Operating Return on Capital is one of the most appropriate metrics to measure the profitability and value of our Legacy business. In any given year this metric records the profits on new deals, the reserve changes from prior year deals and the investment income (excluding unrealized gains or losses) associated with our total legacy portfolio.”
In Program Management, Gross Premium Written grew by 147%, from $149.4 million in 2018 to $369.3 million in 2019.
This led to record Economic Commission Revenue which grew by 148% from $5.2 million in 2018 to $12.9 million in 2019.
“We are pleased to report that in 2019, we achieved a critical milestone as we generated positive Economic EBITDA of $1.8 million compared with an Economic EBITDA Loss of $3.8 million in 2018.
“2019 was an outstanding year for R&Q and in 2020 our opportunity set continues to grow. We will continue, as is our tradition, to be patient and disciplined as we continue to grow our businesses.”