R&q Insurance Share Discussion Threads

[red ninja] 01/7/2023 09:15

The old management took on the asbestos legacy rundown and did not adequately deal with it. It was a ticking time bomb.

However, I don't think they have explained their strategy for the future, as in why sell Progamme Management , it easily seems the most attractive part of the company.

[scandinvestor] 30/6/2023 16:07

Obviously changing accounting standards hasn’t helped, but the argument that the failure of RQ is due to the old management is wearing decidedly thin.

[red ninja] 30/6/2023 08:40

William Speigel was seen as a star performer to get him in they gave him £2 million in shares and a good package. The problems with legacy are not his fault, but the old regime of Quilter and Randall.

[scandinvestor] 29/6/2023 22:48

Someone’s making good money here, but it’s not the shareholders!

[simon gordon] 29/6/2023 20:52

This is nuts...

The Insurer - 29/6/23:

R&Q CEO Spiegel ranks as best-paid London insurance CEO despite record 2022 loss

[controlledmadness] 29/6/2023 17:24

So seeing Accredited profit was around 55 million , what would accredited fetch if sold?
My guess is around 1 billion as its still growing.

[simon gordon] 29/6/2023 17:10

Top,

Legacy crushing them, lucky they had Accredited, otherwise they'd be bust.

Slater really dropped the ball by turning down 170p, thought the Wall Street boys were turning him over, when in fact they were saving shareholders bacon.

[topvest] 29/6/2023 10:17

Truly dreadful results. I had a lucky escape with this.

[edmonda] 14/6/2023 12:08

New research note out from Equity Dev on the equity raise by R&Q Insurance in context of the strategic reshaping of the Group.

Read it and hear audio summary below:

[simon gordon] 12/6/2023 07:10

Jeez, it looks like shareholders are going to be stuck with Legacy.

"A process is underway for the potential sale of Accredited with interest expressed from a number of parties. In addition, a variety of strategic alternatives are being explored in relation to R&Q Legacy."

[archy147] 06/6/2023 15:22

Probably because I couldn't take any more and sold out a few days ago.

Don't you just hate it when that happens?

[superadams] 06/6/2023 15:20

Why the current strength I wonder ?

[foreverbull] 23/5/2023 17:15

Any news??

[foreverbull] 04/5/2023 06:05

Does this mean "Stay away from this stock for a while until there's clearer direction in terms of both group restructuring and profitability"?

[simon gordon] 03/5/2023 18:02

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.

[simon gordon] 03/5/2023 17:55

48m shares traded today.

There is an article on Insurance Insider about the split but I've used up my free trial, anyone up for it?

R&Q: Time for a conscious uncoupling

[edmonda] 06/4/2023 13:33

It is indeed a material transformation is under review by R&Q: to create 2 separate entities in program management and legacy. Equity Dev await details of the plan before amending numbers but publish comments today and expect any separation to highlight inherent group value.

Read/listen to new note here:

[foreverbull] 05/4/2023 16:20

I think they may have bought the portfolios at aggressive pricing in the past which is hurting the legacy profitability... the Programs business hopefully may be able to put the Company in a better position

[simon gordon] 04/4/2023 18:12

FB,

It's Dollars not Pounds.

The loss is as forecast.

I don't understand the bit about higher reserves and accounting treatment.

Legacy has killed the share price, if hadn't been for Program the company would have sunk. Previous management handed the new management a poisoned chalice, at least they are serious deal makers and are trying to get shareholders some money back. Was a poor decision to block the 175p from Brickell.

[foreverbull] 04/4/2023 08:59

Overall the Group is expecting a loss of upto £40mThe company expects to obtain regulatory and lender consent for the reorganisation in Q2 this year....

[simon gordon] 04/4/2023 07:31

I wonder if they will flog Legacy and leave Accredited with the listing?

"...the Board of R&Q is reviewing strategic alternatives to separate Accredited and Legacy Insurance, which will include a legal reorganisation followed by strategic transactions with third parties to achieve this objective. R&Q expects the separation will set each of Accredited and Legacy Insurance on more favourable footing to deliver profitable growth, each with their own appropriate capital structures."

[simon gordon] 09/3/2023 07:51

This snippet is in Strategic Equity Capital's HY results this morning:

"R&Q Insurance Holdings, a global non-life specialty insurance company, following a cautionary statement and weaker than expected interim results"

Reading those Interims I see no indication from William Spiegel of the above, but when Barclays issued their note in December it was clearer to see.

[red ninja] 04/3/2023 07:48

It mainly happened last year (ie 2022) October 17 - 18th.

Phoenix dropped almost 8% and Scopia went to 7.95%.

The recent Scopia buying took them over the 8%.

Thus it is a misleading RNS they have in reality gone from 7.95% -> 8.01%

See 18th October 2022 RNS :-

[controlledmadness] 03/3/2023 17:58

I saw Scopia suddenly went from 0 to 8 percent holding. Would have expected reports showing that some big holders had reduced holding.
So where did the holdings suddenly appear?

[edmonda] 23/2/2023 08:41

shares in R&Q understandably up today as it reports a record year for Program in FY22 - GWP of $1.8bn +80% and Fee Income $80m +78%. Plus the partnership pipeline remains strong.

It also agrees to sell its 40% stake in Tradesman to majority partner for c. $47m - a healthy ROI on an investment no longer seen as strategic.