30 April, 2018
The Board of Randall & Quilter (AIM: RQIH), the Bermuda based legacy acquisitions and global program underwriting management specialist, announces the Group’s full year results for the 12 months ended 31 December 2017.
Ken Randall, Group Chairman and CEO, commented:
“2017 was a year of transformation for Randall & Quilter as we refocused and simplified the business around legacy acquisitions and insurance program underwriting management. However, this did not divert the business from delivering strong underlying earnings growth of 38%. Pre-tax profits for the year were £23.5m including, an £11.8m net profit from the sale of our Lloyd’s Managing Agency.
“As planned, the additional £47m net capital raised from new and existing shareholders in October has now been fully deployed by increasing the capital of Accredited Surety and Casualty Company Inc. and R&Q Malta. The resulting improvement in Accredited’s A.M. Best credit rating and achieving a new A.M. Best A- (Excellent) rating for R&Q Malta has enhanced the range of opportunities available and enabled us to secure increased commission rates.
“I am pleased to report that we have an excellent pipeline of new business in both program underwriting management and legacy acquisitions. 2017 saw a further increase in the profit contribution from legacy acquisitions. Program underwriting management business has been building steadily, especially towards the end of the year and we anticipate strong future profit growth from this business area, as commission earnings from new program launches gain momentum from the end of 2018 and beyond.
“In 2018 and 2019 we should finally see a positive contribution from our residual participation on Lloyd’s Syndicate 1991. There is also potential for an increase in investment earnings as we continue to build our “float” of cash and investments in an expected rising interest rate environment. In this regard, our float has more than doubled since 2015 and now totals over £600m. We shall continue to actively manage our investment portfolios in high quality, fixed income securities with overriding emphasis on protecting capital values whilst benefiting from the anticipated rises in global interest rates.
“As a Group we have always seized upon opportunities which inevitably come from market turbulence and this is certainly true today as we witness major upheavals in the global insurance industry – especially those arising out of the challenges posed by Brexit and the emergence of new technologies.
“We are progressing with the possible launches of a small number of “Fintech” program underwriting management initiatives and see long term growth potential through using our extensive insurance licences in the USA and Europe to deliver “disruptive” technologies to the market.
“The business continues to deliver strong distributions to shareholders. The Board regularly reviews its distribution approach, and after due consideration it has decided to adopt the “return of capital” approach for the next distribution.
“In summary, I believe the business is in good shape. With a strong and energised management team, we are very well placed to develop and profit from the multiple opportunities in our chosen business segments. “
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