Hamilton
20 April 2017
Reporter: Stephanie Palmer

R&Q more than triples pre-tax profits in 2016


Randall & Quilter (R&Q), the Bermuda-based non-life insurance investor, saw its year-end profits triple for 2016.

The group’s year-end results showed a pre-tax profit of £8.5 million for 2016, compared to just £2.8 million in 2015.

Included in the pre-tax profit was a £7.9 million contribution of net reserve release in run-off insurance companies, however this figure has decreased from the £8.3 million recorded last year.

The group also reported “excellent contribution” from 15 completed legacy transactions, with especially strong growth in North America.

It also experienced continued “good performance” in its UK operations of the insurance services division but “widening losses” in the US as a result of further investment in the healthcare initiative.

The results found that the group’s return on equity last year was 13.5 percent, an increase on 2015’s 4.4 percent, while its investment return increased to 2.7 percent compared with 1.1 percent the previous year.

According to R&Q, the overall mission and purpose of the group is “to offer investors profits and capital extractions from legacy non-life insurance acquisitions/reinsurances and grow service revenue and commission income from its licensed carriers in the US and EU/UK writing niche and profitable business, largely on behalf of highly rated reinsurers”.

Ken Randall, chair and CEO of R&Q, commented: “I am pleased to report that, as indicated in the recent placing announcement, the group traded very well in H2 2016 with full-year profits ahead of board expectations and significantly higher than the prior year.”

Randall added: “In addition, the balance sheet was boosted by further foreign exchange-related gains, partly offset by adverse movements in the international financial reporting standard calculation of the pension deficit. Completion of 15 legacy transactions during the year and further net reserve releases from the insurance companies in run-off were the primary drivers.”

“The simplification of the group’s business model continues, with certain non-core operations identified for disposal. This will enable a renewed focus on our core business areas where we believe there is exciting growth potential, the likes of which we have not seen for some time. These areas include the acquisition of run-off portfolios and building recurring commission revenue from using our licensed carriers in the US and EU to write niche and profitable books of property and casualty business, largely ceded to highly rated reinsurers.”

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