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| Share Name | Share Symbol | Market | Stock Type |
|---|---|---|---|
| R&q Insurance Holdings Ltd | RQIH | London | Ordinary Share |
| Price Change | Price Change % | Share Price | Last Trade
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|---|---|---|---|---|
| -0.30 | -11.95% | 2.21 | 16:35:29 |
| Open Price | Low Price | High Price | Close Price | Previous Close |
|---|---|---|---|---|
| 2.26 | 2.26 | 2.26 | 2.21 | 2.51 |
| Industry Sector |
|---|
| NONLIFE INSURANCE |
| Top Posts |
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Posted at 24/4/2024 23:26 by researchguru1 I’m not a member of the London South East BB. To this end, could somebody please post below on the platform, and specifically for the attention of the ‘financially illiterate’ muppets on that BB deliberately misleading newbies by spinning today’s 17:40 RNS as ‘Excellent&rsqFor the record, and to be absolutely clear, R&Q Insurance Holdings is selling its 49% interest of the Corporate Liabilities Joint Venture to Obra Capital Management for £21.5m ($27m). The proceeds will be used to pay down the group's Revolving Credit Facility and retaining cash in regulated entities. R&Q Insurance Holdings is also selling its fully-owned subsidiary Randall & Quilter America Holding Inc. (holding company of the Accredited business) to Onex Corporation. Net cash proceeds on closing are now expected to be between £52 – £88m ($65 – $110m). The net cash proceeds will be used to pay down a fraction of the company’s enormous debt of £267m ($333m as of the 30 June 2023), which includes the group's Revolving Credit Facility as well as subordinated notes. Annual interest being paid on the debt is £12.4m ($15.9m). So basically, THE COMPANY IS IN MAJOR FINANCIAL DISTRESS; even after receipt of the net proceeds (from both sales) which won't be enough to steady the ship. The significant reduction in cash proceeds is down to the business continuing to haemorrhage cash at alarming levels. More importantly, and PRIVATE INVESTORS REALLY NEED TO MAKE A NOTE OF THIS, the company is engaged in INTENSIVE DISCUSSIONS with its lenders and regulators with a view to the approval and implementation of the sale. In other words, THE LENDERS ARE YET TO APPROVE THE SALE. And judging by the company’s horrendous performance, the lenders may choose alternative options to protect their interest, and other secured creditors’ interests. Those options are unlikely to recover any value for equity holders. . |
Posted at 23/10/2023 16:12 by simon gordon Edward,According to R&Q's website they are still a holder. |
Posted at 23/10/2023 12:28 by simon gordon They raised £103m at 105p just over a year ago.What a money pit: "In the event that Accredited does not retain a fully independent rating, the Board is clear in its view that there is a significant risk that AM Best will downgrade Accredited. Such a downgrade would have a detrimental impact on Accredited's ability to successfully operate its business, particularly in the United States where an 'A-' financial strength rating is a minimum requirement from Accredited's counterparties. The Board therefore believes that a downgrade would have material implications on R&Q's ability to continue as a going concern. Additionally, the Board is of the view that the current financial leverage of R&Q is unsustainable and if the Sale were not to proceed and the Available Net Cash Proceeds were not available to facilitate a material de-leveraging of R&Q, R&Q may not be able to continue to satisfy or obtain waivers on the covenant requirements for its existing debt facilities or repay certain of its debt facilities as they become due. A potential default or cross-default by R&Q on its existing debt facilities may lead its lenders to take action to protect their interests by requiring collateral or enforcing their security over certain R&Q assets, resulting in a materially worse outcome for R&Q and its shareholders. The Sale constitutes a fundamental change of business and under the AIM Rules for Companies, Rule 15 will apply. The closing of the Sale is therefore conditional on the approval by a majority of shareholders at a Special General Meeting. The Special General Meeting of R&Q's shareholders is expected to take place by the end of the year." Are they going to reinsure the existing book: "In parallel to executing its organic plan, the Board will also continue to explore potential transactions to de-risk and reduce volatility in R&Q Legacy's balance sheet or otherwise maximise value to stakeholders." Artemis - 23/10/23 Shedding the Accredited program management business should put the R&Q legacy business on stronger footing and result in a return to the firms historical focus, but under a new strategy of utilising third-party capital to support the majority of the run-off risk underwriting it enters into. The performance of the first vintage of the Gibson Re legacy reinsurance sidecar is therefore going to be critical, as R&Q will need to be able to demonstrate that it delivers the returns investors expect, or raising a second vintage could prove a challenge for the company. |
Posted at 03/5/2023 18:02 by simon gordon The Insurer - 2/5/23:R&Q working with Howden Tiger, Fenchurch, Barclays and Numis on strategic review London-listed R&Q has retained a number of advisors – including Howden Tiger, Fenchurch Advisory, Numis Securities and Barclays Bank – as it explores a strategic review of the business, The Insurer understands. The appointments come as R&Q pursues plans to separate its program management and fronting arm Accredited from its struggling legacy business. Sources have told this publication the advisors are working on a variety of different options for the future of R&Q as well as the prospect of a bifurcation of the company. It is understood the advisors are also exploring the potential for a capital raise which may be required to appease rating agency concerns ahead of any potential split of the company progressing. When announced on 4 April, R&Q said the legal reorganisation of the company would be subject to regulatory and lender consents which it said it expects to obtain in Q2 2023. AM Best put R&Q’s rating under review with negative implications following the announcement of its tabled plans to split its two business units. At the same time R&Q warned investors that it would post a heavy loss for 2022 as it deferred its reporting for the previous year until June. The expected $30mn-$40mn operating loss for 2022 is being driven by a $55mn-$60mn loss in R&Q’s legacy operations, which AM Best said will likely lead to a material weakening of the group’s risk-adjusted capitalisation. Corporate expenses added $35mn to the “preliminary and unaudited” figures for 2022 while its program management arm Accredited is in profit to the tune of $55mn-$60mn. As this publication reported, the announcement was effectively a profits warning as the stock is lightly covered and corporate broker Numis previously projected a smaller full-year operating loss of $19mn. The share price tumbled following the announcement and has since remained close to a historic low, closing on Friday at 60.98 pence a share – which values R&Q at around £200mn. Under the stewardship of William Spiegel, who was parachuted in to succeed the retiring founder Ken Randall in 2022, R&Q has witnessed a failed buy-out at 175 pence a share, heavy losses, a defeated shareholder activist campaign, an almost entirely new leadership team and an emergency equity issue to prevent an AM Best downgrade. R&Q is understood to have a long-standing relationship with Fenchurch Advisory, with the firm last year advising the company in its defence against shareholder Phoenix Asset Management’s attempt to requisition management changes. Barclays Bank has acted as the joint bookrunner and joint broker on a number of transactions undertaken by R&Q, including on its recent disposal of its stake in Tradesman. Numis Securities Limited – which is acting as nominated adviser (NOMAD), joint broker, and financial adviser in the strategic review – has also worked with R&Q in the past on a number of transactions. It has acted as R&Q’s NOMAD on the group’s activities, strategies and performance for several years. R&Q split Putting forward the rationale for a split, Spiegel said it is now in R&Q shareholders’ interests for Accredited to “stand on its own”. Accredited – which provides fronting services to MGA carriers in the US and Europe and depends on a minimum A- financial strength rating – has grown to $1.8bn in 2022 and fee income of $80mn. However, it currently relies on rated insurance company entities which currently also house and write R&Q’s legacy business. R&Q has laid the blame for its 2022 loss squarely on its legacy business and its failure to complete enough transactions – with gross reserves acquired in 2022 standing at just $70mn, significantly down on previous years – as well as projections for its legacy sidecar Gibson Re. R&Q and Howden Tiger declined to comment on this article. Barclays Bank, Fenchurch Advisory and Numis were approached for comment. |
Posted at 05/12/2022 20:51 by simon gordon 3800,The investors who turned down 175p think the share is good value at 175p. The issue now is that Phoenix are getting out and it's a big overhang which is depressing the price. They'll eventually be cleared. The business continues to modernise, grow and become a better quality operation on a bigger scale. If they get close to 18p in 2024 and it's rated at eight times you get 144p. With the quality of the earnings it probably deserves 12x because there is plenty of growth to go for. 12x = 216p. That EPS figures comes from the Edison note of 18/8/22. They have big plans to scale the business and are investing heavily in software automation to bring this about. Maybe they can get to $5bn in Program and $3bn in Gibsone RE in 2028. That'd give you $175m profit at Program and maybe $80m at Legacy = $255m minus $35m corporate overheads, giving a pre tax profit of $220m and a tax rate of c.10% in Bermuda. That's a net £164m profit after tax at today's dollar rate. Now that'a all conjecture but shows the potential if all cylinders get firing. That's probably why some turned down 175p and thought about it as a long term investment, not a flip and fill. |
Posted at 03/12/2022 20:26 by simon gordon The Insurer - 28/11/22:Cracks are beginning to emerge in the hybrid fronting carrier space. Here there has long been a sense that there would be winners and losers in an increasingly crowded market segment where the imperative to grow for some had seen a large number of programs onboarded in a relatively short period of time. There have also been concerns about over-concentration in program portfolios. And news revealed by our sister publication The Insurer just before Thanksgiving that Tradesman is moving its flagship construction general liability program from Accredited to Clear Blue highlights the fragility at some of the cohort of fronting carriers that have emerged in recent years. Prior to the move, New York-based Tradesman is understood to have generated around $325mn of premium in 2022 across its book of programs, the majority of which were written on Accredited paper. The construction GL program alone is thought to account for over $200mn in annual premium and is growing fast. Although it is expected to retain other Tradesman programs for now, the loss of its largest single deal in the US is a major blow for R&Q-owned Accredited. The parent company has been going through its own trials and tribulations of late. Its share price has fallen to an all-time low amid activist investor battles, leading to concerns over a potential capital squeeze. For the fronting business Accredited that uncertainty is having a tangible impact. There may now be growing fears that other counterparties will look at their relationships more closely, which will further challenge retention of business. The move shows the potential in a transitioning marketplace for some to prosper as others suffer. |
Posted at 08/12/2021 10:37 by simon gordon Artemis:What are insurance-linked securities (or ILS)? Insurance linked securities, or ILS, are essentially financial instruments which are sold to investors and whose value is affected by an insured loss event. The term insurance-linked security (ILS) encompasses the ILS asset class, which consists of catastrophe bonds, collateralized reinsurance instruments and other forms of risk-linked securitization. Insurance-linked securities (ILS) are investment assets generally thought to have little to no correlation with the wider financial markets as their value is linked to insurance-related, non-financial risks such as natural disasters, other insurable specialty risks and life and health insurance risks including mortality or longevity. As securities, some insurance-linked securities (mainly catastrophe bonds) can be and are traded among investors and on the secondary-market. They allow insurance and reinsurance carriers to transfer risk to the capital markets and raise capital or capacity. They also allow life insurers to release the value in their policies by packaging them up and issuing them as asset-backed notes. The market for insurance-linked securities (ILS) emerged in the mid-1990’s as a mechanism for insurance and reinsurance companies to access the deepest and most liquid pool of capital available, the global capital markets. Now an established alternative asset class, insurance-linked securities (ILS) are typically invested in by large institutional investors such as pension funds, sovereign wealth funds, multi-asset investment firms and funds, endowments, as well as some family office investors. As well as forming part of the spectrum of pure reinsurance risk transfer tools available to the global insurance market, insurance-linked securities (ILS) are also used by some large corporates to access insurance capacity from the capital markets, as well as by governments to secure disaster risk financing. |
Posted at 06/12/2021 14:25 by simon gordon Profile in the WSJ Private Equity Pro from 2012:RISING STAR: Pine Brook's Spiegel Proves That Nice Guys Can Finish First Laura Kreutzer November 26, 2012 William Spiegel learned the importance of hard work early in his life. "My dad [would say]: 'If you ever find yourself in a situation with your job that you have completed your task and you have nothing more to do, go find a broom and sweep,' " said the 50-year-old managing director at Pine Brook, a New York-based firm focused on midmarket investments in financial services and energy. That work ethic, combined with an affability he attributes partly to his Canadian heritage, often helped Mr. Spiegel win over not only his own colleagues to his investment ideas but also management teams and other investors. "He's got an incredible sense of energy and an incredible desire to learn and move things forward," said Howard Newman, the firm's president and chief executive, who jokingly compared Mr. Spiegel to the Energizer Bunny. Mr. Newman adds that those qualities are important to a firm like Pine Brook, which often commits hundreds of millions of dollars to create a company from scratch. Back in early 2007, for example, Mr. Spiegel was presented with an investment opportunity in an insurance business within Lloyds of London . Although two of the three business lines up for sale didn't appeal to Pine Brook, Mr. Spiegel saw promise in the third, which bought insurance companies or syndicates that were no longer underwriting new policies. Ultimately, however, he needed to convince Lloyds to give the company a license to create an independent runoff business within Lloyds, something that the London financial giant had never done before. After months of back and forth, Syndicate Holding Corp. was launched in May 2007 and, over the past four years, the business has averaged a more than 30% annual return on equity. "William saw an opportunity that was not readymade," said Mr. Newman. "It wasn't even Play-Doh; it was the stuff before Play-Doh." Mr. Spiegel's persuasive powers also proved useful in the establishment of mortgage insurer Essent Guaranty Ltd. In late 2007, Mr. Spiegel saw an opportunity to create a new mortgage insurance business, as many veteran insurers reeled from losses stemming from the collapse of the subprime market. He recruited Mark Casale , a former president of mortgage insurer Radian Guaranty , to help with diligence. Although Mr. Casale admits he was skeptical at first, Mr. Spiegel ultimately convinced him of the potential payoff in creating a new market entrant with a clean, well-capitalized balance sheet. In 2008, they launched Essent with $500 million in capital and installed Mr. Casale as chief executive. Mr. Spiegel's affable nature and sense of vision not only helped the company attract other investors besides Pine Brook, but also helped smooth things over when disagreements arose, according to Mr. Casale. For example, in 2009, not long after Essent launched, the company was presented with a deal that would have brought in revenue, but Essent's management team didn't believe it would serve the company's long-term interest. Although some of Essent's other investors wanted the company to do the deal, Mr. Spiegel persuaded them to back off. Ultimately, the original vision paid off, according to Mr. Casale, who said that since it wrote its first policy in 2010, Essent has grown to $10 billion of insurance in force, a common metric for measuring mortgage insurers. He also estimates that it makes up about 10% of the mortgage insurance market. "[William] helped preach patience with other investors and even with the management team," said Mr. Casale. "When you're a manager building an organization with as large a scale as ours, the last thing you need is pressure from investors." Career Path William Spiegel helped launch Pine Brook in 2006 after President and Chief Executive Howard Newman tried unsuccessfully to recruit him to head the financial services group at Warburg Pincus a few years earlier. Before that, Mr. Spiegel was with Cypress Group, where he managed the firm's investments in financial services and health care from 1994 until 2006. Education Mr. Spiegel earned his undergraduate degree in economics from the London School of Economics, a master's in economics from the University of Western Ontario and a master's in business adminstration from the University of Chicago. Personal Although he played hockey in his youth, Mr. Spiegel currently prefers tennis, downhill skiing and jogging. |
Posted at 23/11/2021 19:55 by simon gordon Some interesting comments on Gibson RE and Program in this interview with William Spiegel in September:Artemis - 6/9/21 Gibson Re sidecar “not changing the recipe book” at R&Q: Spiegel ....R&Q has elected not to own its collateralised reinsurance sidecar vehicle, which is a little unusual as most sponsors tend to own the special purpose structure and the investors purely allocate their capital to it. But in the case of Gibson Re Ltd., it has been set up by the third-party investors, along with a second Bermuda based company Gibson Ltd. as a kind of manager. Spiegel sees this as strategically the right thing to have done for R&Q. “It’s more efficient for us to put the 20% on our own balance-sheet, not own the sidecar. The sidecar is a separate entity owned by the investors but the relationship is a quota share basis, so any deal we do they will do as well,” he explained. “That’s part of all of our deals. There should be no cherry-picking and all the deals will be done 80/20 and there will be no change in our underwriting and investment standards.” The goal is clearly to turn Gibson Re into a sidecar that gets renewed to recapitalise R&Q’s legacy dealmaking firepower as and when needed, to ensure it can always have access to the funds to continue building out its legacy premium and investment portfolios. Which is why Spiegel sees the sidecar as something permanent, a shift in the business model and one that should see R&Q increasingly reliant on third-party investor capital to support its legacy business. He told us, “What I do see is that Gibson Re 2, is raised in three years, or however long it takes to put the money to work, and then Gibson Re 3, and it becomes a permanent part of our strategy of continuing to make us a capital-lighter business model.” “But we need to do a good job,” he said. “This is not a strategy where, the market’s hard and let’s raise a sidecar. Both of our markets have secular growth and in a capital intensive business with secular growth you need access to additional forms of financing and that’s what this is. “We hope this will be a permanent part of what we do going forward.” We asked Spiegel whether R&Q has ambitions to tap into third-party investor appetite on the program management and fronting side of its business as well, given that is also fee income based and could also benefit from taking greater ownership of the reinsurance capital supporting those programs. “I think there is an opportunity,” Spiegel said. “We are the paper for about $900m annualised of gross written paper today and we’ve made it clear to the market we should be at $1.75 billion in 2023. “We have access to and control a lot of premiums, so is there a way to have a sidecar set up so third-party investors have direct access to the MGA’s we work with? There could be. “That’s certainly something that’s on our mind but it didn’t have the same level of need, because we’re taking less than 10% and there’s a lot of quota share support, whereas legacy was all on our balance-sheet and it was very capital intensive.” Getting over the drag of the public-market balance-sheet seems to have been key for R&Q in this transition and Spiegel feels the company’s shareholders should start to think differently about the company now. “I think they should. They should think about us as an asset manager and a fee-based business and not a balance-sheet business,” he commented. Adding that, “We’re hoping we can move the business to more of an asset management business and more of an asset management multiple.” Valuation of the business is clearly on Spiegel’s mind and his forecasts for the share price have been bullish historically. It’s going to be interesting to see how the market takes to this new model, given shareholders funds are now perhaps more important for the corporate side, than the underwriting side. It may take shareholders a little time to come to terms with this, but the potential to lean on efficient capital market funding to support a growing legacy portfolio could come with rewards, as long as the business acquired and written is of high-quality and earns out profitably with no negative surprises. But there is no temptation here to try and compete for the very largest legacy and run-off market deals, Spiegel said. “I think if we wanted to we could. But we really like the niche that we’re in, which is the small to mid-sized deals where we have a big competitive advantage. “If you look at who’s done deals over the last five years, we’ve done more than any other legacy firm and that’s because we do the small to mid-sized deals and we’ve got a good recipe book. “One of the reasons investors supported us in Gibson is that we’re not changing the recipe book. So, this isn’t about let’s change the deals that we’re doing at all, it’s actually let’s do more of what we’re doing,” he remarked. On the investor side, unsurprisingly Spiegel wouldn’t be drawn on naming the backers of Gibson Re sidecar, but he’s pleased with the names he’s secured as capital partners it seems. Explaining that, “They’re very sophisticated insurance investors and that gave us great comfort because it was people that really understood the business. As an asset manager you’re always better off if your investors really understand your business. “This is a very sophisticated group and we’re very happy to partner with them and hope they will grow with us.” On the size of the sidecar, at $300 million, which was smaller than the initial sidecar proposals at R&Q had been contemplating, as we covered back in July, Spiegel said the capital raised was designed to match the business opportunities the company realistically believes it can win. “We raised what we felt we could deploy. This wasn’t an AUM game at all for us. We’ve seen the demand for our capital and we sized this to take advantage of the opportunities over the next three years,” he said. On the time it could take to deploy the capital, Spiegel added, “I’m hoping we can put the money to work faster, but that isn’t the goal. We might put it out equally over three years, we might put it all out at the end of the third year depending on where the opportunities are. “Our acquisition approach is unchanged here, we raised what we thought we could invest.” With the Gibson Re sidecar set to take an 80% share of all legacy deals that meet its requirements, while R&Q’s balance-sheet will get the remaining 20%, both sides will be motivated to ensure the profitability of the business acquired and underwritten. Spiegel highlighted that the underwriting practices don’t change and neither does the investment side of this business, as legacy and run-off generates significant investable float. That’s important he feels, commenting, “Everything is aligned. It’s all about alignment of interests, it has to be for the investors.” Shareholders, analysts and new sidecar investors alike will be watching R&Q’s results closely going forwards, to see how this new strategy beds in and whether the earnings stream is indeed as smooth and predictable as Spiegel hopes for. |
Posted at 14/11/2021 11:05 by simon gordon It looks like these guys, only incorporated in 2017, brought the 1st sidecar to the market:Premia Expands Reinsurance Capacity with Elevation Re Formation December 31, 2020 PEMBROKE, Bermuda–(BUSIN This arrangement enables Premia to support run-off reinsurance opportunities with additional capacity and allows investors in Elevation Re to participate alongside Premia in the rapidly-expanding P&C run-off market through a unique and innovative structure. Elevation Re, a newly formed segregated portfolio company that has been licensed by the Cayman Islands Monetary Authority, has raised over $265 million in initial commitments from third-party institutional investors. Bill O’Farrell, Chief Executive Officer of Premia, said: “I am very pleased that leading institutional investors quickly grasped that the outstanding team we have assembled, coupled with the track record we have achieved over the last four years, makes Elevation Re a compelling investment opportunity. This transaction brings our total managed capital to over $900 million and we look forward to deploying this capacity into thoughtful solutions for our clients.” TigerRisk Capital Markets & Advisory acted as exclusive structuring and placement agent on the transaction. Sidley Austin LLP and Conyers Dill & Pearman acted as deal counsel and Mayer Brown LLP acted as legal counsel for the investors. About Premia Premia Holdings Ltd. is an insurance and reinsurance group with operations in Bermuda, the U.S., the U.K., and Europe that is focused on sourcing, structuring and servicing business in the global property and casualty run-off market. With over $900 million in managed capital, Premia is well equipped to execute acquisitions and reinsurance transactions in the global P&C run-off market. Premia was launched in 2017 as a run-off specialist and was sponsored by Arch Capital Group Ltd. and Kelso & Company. |
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