10 April 2014 Insurance

R&Q closes two new legacy deals

Randall & Quilter (R&Q), the insurance services and investment company, has completed two new deals.

It has signed a reinsurance-to-close (RITC) deal on the 2011 Year of Account of Syndicate 102, originally the Goshawk Syndicate, moving it into the 2014 Year of Account of Syndicate 3330. The business has been managed by R&Q Managing Agency since 2004.

Previously, R&Q provided capital support giving it a 20 percent share of the syndicate result, with the remaining 80 percent being supported by a third party investor.

Following the RITC, R&Q now has a 100 percent interest in the ongoing syndicate result, having assumed full capital support from the third party investor. The estimated net insurance liabilities as at December 31, 2013 were £16.5 million.

R&Q has also reached agreement to receive, by way of novation, all contracts underwritten by one of the cells in SEG Insurance. The contracts have been novated to an existing R&Q owned cell in the group's rent-a-captive facility in Bermuda called R&Q Quest SAC.

SEG wrote business in the cell from July 1, 2007 to July 1, 2010 as a reinsurer of direct policies issued by a large US carrier. The captive wrote workers’ compensation, employers' liability, automobile liability, automobile physical damage, general liability and crime.

Transferring liabilities were estimated at $0.7m as at December 31, 2013 and transferring assets included a customary risk and profit margin over this figure.

Ken Randall, chief executive officer of R&Q, said: "We are pleased to have completed the RITC of Syndicate 102 into the 2014 year of account of Syndicate 3330. We now have a 100 percent economic interest in the result of the business formerly reinsured into Syndicate 102 and have provided additional capital in exchange for a customary risk margin. The transaction further reinforces R&Q's position as an active participant in the RITC market as manager, service provider and capital provider.

“We are also pleased to announce the completion of another transaction in the Bermuda captive market, where our model for sharing cost efficiencies and providing liquidity to owners of programmes in run-off continues to gain traction.  Whether acquisition, novation or loss portfolio transfers, the Group has a suite of versatile solutions for the captive sector. These transactions evidence the Group's continued activity in the acquisition of legacy insurance assets and the pipeline continues to grow with a range of transaction types, geographies and sizes."

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