R&Q’s chairman and CEO Ken Randall made an upbeat statement at the group’s AGM yesterday, identifying areas for further expansion, notably Europe, Lloyd’s and the captives market:
‘The recent acquisition of La Licorne has demonstrated our ability to expand the company’s insurance investment activities into Continental Europe, facilitated by our local partnership with Global Re. Preliminary indications are that the pressures of Solvency II will lead to additional opportunities in Europe from insurers looking to unlock trapped capital through the sale of non-core subsidiaries in run-off.’
He added that the remainder of R&Q’s insurance investments division continued to perform well. ‘Our owned insurance company run-offs are developing as indicated in our final results for 2009. We are also currently examining a number of interesting investment opportunities, especially in the Lloyd’s reinsurance to close market (RITC),’ said Randall. ‘We continue to benefit from our prudent policy of not discounting reserves but we remain cautious about the outlook for investment returns during the remainder of the year and beyond, given the backdrop of persistently low interest rates and continued market volatility.’
R&Q’s insurance services division had also seen some important new business wins, he said. ‘The expectation of an improved performance has been aided by our recent rebranding and restructuring initiatives, our move into broker run-off and the anticipated profit commission from the management contract with syndicate 3330.
‘The acquisition of JMD Specialist Insurance Services, a provider of premium collection, binding authority and broker reporting services, has undoubtedly increased our capabilities in the “live” servicing market, and since the acquisition we have successfully expanded the blue chip client base by agreeing contracts with a number of market participants,’ said Randall. The company is looking at other bolt-on acquisitions in the more specialist end of the live servicing market.
‘The captives division continues to be a reliable performer and fallout from broker consolidation has resulted in a small number of new client wins since year end. Our captives division remains committed to establishing an attractive independent alternative to the captive management operations of the large US brokers. Expansion opportunities are being examined both through ground-up initiatives to increase our geographical scope and through acquisition,’ he added.
‘Good progress has also been made in the new underwriting management division and we are working closely with our first client to gain approval for the launch of a new Lloyd’s “turnkey” syndicate towards the end of the year, with a view to commencing underwriting soon after.’