R&Q posts solid results despite headwinds

Randall & Quilter (R&Q), the insurance services and investment company, has posted solid results for 2013 in line with expectations despite slower than expected premium development on its active managed syndicates and a weaker result than originally anticipated in its underwriting management division.

The group’s total income for the year was £54.2 million, a 5 percent increase on the £51.8 million on 2012. Its pre-tax profit for the year was £9.6 million compared with £11.6 million the year before.

Its Insurance Investments Division made an operating profit of £8.7 million compared with £11 million the year before. It said this unit was helped by a strong contribution from legacy acquisition activity, reserve releases and higher than budgeted investment income. But the weaker than expected results were produced mainly by slow premium development in Syndicate 1991.

Its Insurance Services Division made an operating profit of £9.8m compared with £10.1 million in 2012 boosted partly by high level of credit write backs, particularly in the US, the company said.

Its Underwriting Management Division made an operating loss of £0.2 million – a big improvement on the £1.5 million it lost in 2012. It said this was a result of the higher fee income and cost benefits arising from the increased scale of the Lloyd’s managing agency operations following the launch of Syndicate 1991. However, the cost of continued investment in the division’s infrastructure and slower than anticipated progress in securing third party management contracts resulted in a weaker than expected divisional result overall

Finally, it made an ‘Other Corporate’ operating loss of £2.7 million compared with £2.8 million in 2012, which includes parent company overheads and the costs associated with the Group’s recent re-domicile to Bermuda.

Ken Randall, chairman and chief executive of the group, said: “The Group has delivered a solid result during 2013 which was in line with management expectations despite the impact of slow premium development on its active managed syndicates and a weaker result than originally anticipated in its Underwriting Management Division.

“As reported at the half year stage, a further profit of £1.5 million in respect of Alma Insurance has been reallocated as a prior year adjustment as required by international accounting standards, showing the solid performance in 2013 in a less favourable light.

“We look forward to the future with confidence. Our strong legacy and servicing pipelines continue to offer prospects for profitable development, including in the short term. We have a strong presence in the market for legacy insurance assets although the exact timing of such acquisitions is always difficult to predict. While it has taken longer than planned to build our live underwriting platform, we remain confident that the overall strategy provides a firm foundation for strong, sustainable growth in the future.”