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R&Q’s 2018 profits up 45% to £14.3m despite deferred legacy deals

29th April 2019 - Author: Charlie Wood

Randall & Quilter (R&Q), the Bermuda-based program underwriting management and legacy acquisitions specialist, has posted 2018 pre-tax profits for continuing operations of £14.3 million, a 45% increase from the previous year.

Randall & QuilterMeanwhile, R&Q’s continuing operating profit rose from £14.3 million in 2017 to £18.5 million.

This comes despite a number of legacy transactions being delayed into 2019, most-notably the $80.5 million purchase of Global Re.

The company also shouldered a £2.9 million reduction in anticipated investment return as a consequence of turbulence in global investment markets in the final weeks of 2018.

Looking forward, R&Q Chairman & Chief Executive Officer Ken Randall believes the company has an “excellent” pipeline of new business opportunities that proceeds from the fund raise in March 2019.

The fund raise generated approximately £107 million via the issuance of 69,858,915 new ordinary shares.

“The ‘carry over’ of final stage but not completed acquisitions from 2018 – including Global Re will provide a boost to H1 2019 Group profits,” explained Randall.

R&Q’s new unit Accredited, which comprises its US and European program management business, benefited from AM Best rating upgrades and by the end of 2018 had secured contracts with MGAs which are anticipated to generate annualised written premiums of $500 million.

Elsewhere, for continuing operations, Gross Written Premiums (GWP) shrank from £187.9 million in 2017 to £183.8 million.

2018 saw R&Q dispose of non-core insurance services and captive management operations to the Davies Group.

Since year end, the company have divested its non-core US Bail Bond Business and, as part of the terms of the sale, negotiated reinsurance to protect against adverse claims development on bail business underwritten up to the point of sale.

Randall believes this disposal will have a neutral impact on future Group results.

He adds that the company’s ability to grow been significantly enhanced by the issue of $70m subordinated debt in December 2018.

Finally, Randall states that the upheaval caused by Brexit is to benefit Accredited Europe, which is domiciled in Malta and has regulatory approval to establish a UK branch office.

“Accredited thus is well placed to provide “Brexit solutions” whatever the final Brexit outcome,” added Randall.

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