R&Q expecting much lower results
Randall & Quilter (R&Q), the insurance services and investment company, has reported that it expects its pre-tax result for the full year of 2014 to be materially below market expectations.
R&Q said this was for a number of reasons. Firstly, the receipt of preliminary indications recently received from external consulting actuaries suggests a need to increase net provisions for asbestos related claims in R&Q Re US.
The second factor it cited was the recent disappointing trading performance in its US insurance services division. Thirdly, it said that lower than anticipated investment income owing to poor financial market conditions in recent months would also hit its results.
The deterioration in net provisions for asbestos related claims in R&Q Re US was a risk described in the interim results, although the extent of the deterioration, as estimated as part of the ongoing reserving exercise, is now above the board’s expectations at that time.
“The reduction in investment income expectations is a consequence of the widening in credit spreads, especially in structured and high yield credit. The disappointing trading experienced in the US service operations has been caused by the recent failure to secure certain large anticipated service contract wins,” said R&Q.
R&Q also reported that it has recently signed two EU based portfolio transfer agreements and an agreement to acquire two Bermuda based captives in recent weeks.
“The UK based insurance services operations have traded slightly ahead of expectations whilst the underwriting management operations are broadly tracking to plan,” it added.
“Trading prospects for 2015 remain encouraging, with a continued strong pipeline of legacy acquisition opportunities, some of which are already reasonably progressed, and recent new business wins in underwriting management and UK insurance services set to improve results in these divisions in line with previous expectations.”
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