R&q Insurance Share Discussion Threads

[topvest] 16/11/2009 19:27

Equity Development put out a positive note today on the company following the latest deal.

I'm still watching this one as it generally looks ok.

It's interesting to note that the discount factor judgement may mitigate the impact of the adverse decision significantly and lead to counterclaims on previously settled claims.

All very complex. Could take a while, if not years, to resolve.

I will hold off until things are clearer. There are much safer insurers around than this.

[topvest] 11/11/2009 21:04

Ouch. Looks like bad news, particularly the bit about picking up Berkshire Hathaway's costs. Glad I held off for this decision. Think I will avoid for now until the financial implications of all of this flow through. Difficult to know what the hit is going to be, but I suspect at worst it could be £5m on costs and £xm on additional discounted insurance obligations.

[rj allen] 11/11/2009 14:38

Is this now Randall and Quilter deceased, or a buying opportunity?

[stockscreeners] 25/5/2008 23:48

stock looks way undervalued......

[stockscreeners] 06/5/2008 09:52

nice to see no momentum players in this one.

[stockscreeners] 06/5/2008 03:05

another broker report......

[stockscreeners] 06/5/2008 03:04

this is clearer......

from noble..

Randall & Quilter (RQIH.L)

R&Q is a leading player in the $400bn non-life run-off insurance sector both as a consolidator and as service provider.
R&Q create value by a) supplying services to the run-off industry and b) acquiring portfolios in run-off (have ceased
underwriting), managing down the claims and then releasing surplus capital to shareholders. (Given the complexity of the sector,
please see our initiation note dated 8 February 2008 for a more in-depth analysis).

Catalysts

i) General turmoil in insurance industry likely to lead to an increase in acquisition opportunities for R&Q as
insurance companies look to strengthen balance sheet by disposing of run-off portfolios.
ii) Further capital extractions (see recent Chevanstell example below).
iii) Newsflow on the establishment of the Bermuda based reinsurance business for which regulatory approval has
now been received.
iv) FY 2007 results due 15th May.

Of particular interest?

The market ignored the spectacular announcement by R&Q on the 31st January 2008 of the approval by the FSA for the
release of £11m regulatory capital from Insurance company Chevanstell.
In simple terms:
i) R&Q bought Chevanstell in November 2006 for £13m when it had an estimated NAV of £21m.
ii) R&Q managed down the liabilities to the point that the FSA has approved the release of £11m. Post the release
the NAV remains at a healthy £19.5m.
iii) Assuming a 25% discount to NAV, the remaining value of Chevanstell is around £14.6m (.75 x 19.5) plus the
£11m cash, gives a value of £25.6m against the initial investment of £13m. Equivalent to a 97% return on
investment in just over one year. Furthermore, this ignores the fees that the Insurance Services business will have
earned from managing the run-off process.
This proves that R&Q are more than capable of buying often unwanted insurance portfolios, managing down the
liabilities and then releasing capital well in excess of the initial acquisition cost. With this track record we look forward to
R&Q making more acquisitions.

What could drive earnings upgrades?

i) Acquisitions. Our forecasts are conservative given that we have not factored in any further acquisitions which
will be a key driver of future growth. However, we would be surprised if no acquisitions were announced within
the next 12 months.
ii) Contributions from the Bermuda based reinsurance business and the nascent Liquidity Management division.

Valuation

With differing business streams, we believe a sum of the parts approach is the most appropriate way to value R&Q. Our
fair value of 182p (33% upside) applies an EBITDA multiple of 8 times to the steady cash generating Insurance Services
Division and values the Insurance Company Division on a 25% discount to NAV. At the current share price we forecast
the group to have a 2008 dividend yield of 3.5%.

[stockscreeners] 06/5/2008 02:43

a fantastic looking chart and is riding out the bear market very well.

one to watch.

dyor.

[stockscreeners] 30/12/2007 12:10

Insurance specialist comes to AIM
20/12/2007

Dealings have started in Randall & Quilter Investment Holdings, which services and acquires insurance companies running off old policies.

Ken Randall, a veteran of the Lloyd's insurance market and long-time specialist in run-off business, is chairman and chief executive officer of the company, which has raised £20 million of new money at 125p through Numis Securities, to value the company at nearly £70 million. Noble is nominated adviser to Randall & Quilter, whose existing shareholders have sold £11 million worth of shares at the same price.

The company says it wants to buy and administer solvent insurance companies in run-off. That is when they are no longer writing new policies but are paying claims and investing premiums on old ones.

Randall is an experienced player in this field, having first made a name for himself running off Lloyd's insurance underwriting syndicates. The board says it intends to pay a dividend of 4.8p a share for 2008, giving the shares a prospective yield of around 3.8 per cent at the placing price.

They should have specialist appeal.

web site....

DYOR.