1 December, 2017
On 27 June 2017, R&Q announced the sale of its Lloyd’s managing agency, R&Q Managing Agency Ltd (‘RQMA’) to Coverys, a leading provider of medical professional liability insurance based in Boston, Massachusetts, subject to regulatory change of control approval. We are now pleased to announce that all of the necessary approvals have been obtained and the transaction completed on 30th November 2017. RQMA will subsequently be renamed as Coverys Managing Agency Limited.
As previously announced, the sale proceeds to be received in cash are $22.6m, which, after costs and related incentive and other payments, will result in net proceeds to R&Q of £13.1m. This is expected to generate a gain of approximately £11.8m over the Group’s carrying value of RQMA.
RQMA is currently the managing agent for three syndicates: Syndicate 1991 which writes niche SME property and casualty business with a capacity of circa £127m; Syndicate 3330 which provides reinsurance-to-close and other reinsurance solutions for legacy business within Lloyd’s; and since, 27th October 2017, Syndicate 1110 the former ProSight syndicate which was placed into run-off in 2017. R&Q also acquired ProSight’s corporate members on this date and so participates on 100% of Syndicate 1110’s open years. R&Q has the benefit of substantial adverse development reinsurance from a ProSight group company.
RQMA also provides back office support to Syndicate 2088; the syndicate managed by XL Catlin and backed by China Re.
In addition, Coverys has gained in-principle approval from Lloyd’s to establish Syndicate 1975 which will be managed by RQMA. Syndicate 1975 is expected to commence underwriting on 1 January 2018 and will write both med-mal insurance and healthcare reinsurance.
Ken Randall, R&Q chairman and CEO, commented: “We are pleased to have concluded this transaction with Coverys which is a key element of our strategy to focus on legacy acquisitions and the writing of quality program business, which is mostly reinsured to highly rated reinsurers.
“We have already demonstrated how Coverys and R&Q are able to continue working together through the approval process of turnkey Syndicate 1975 and the ongoing management of the run-off Syndicate 1110. We look forward to continuing to build this relationship and exploring further opportunities to work together in the future. We remain an active participant as regards legacy portfolios at Lloyd’s and have a pipeline of further opportunities which we hope enhance our collaboration with Coverys.”
Gregg L Hanson, CEO and President of Coverys, said: “Through the acquisition, Coverys will inherit the continued responsibility to support the syndicates currently under management with RQMA. The acquisition additionally allows Coverys to assist new underwriting syndicates that seek to launch their business at Lloyd’s, while also maintaining business operations for existing syndicates. We are excited to enter the London marketplace and will look to RQMA’s industry knowledge and expertise to guide us in this prestigious market.”
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