R&q Insurance Share Discussion Threads

[lord gnome] 02/10/2019 07:15

If RQIH can make another 90% I won't be disappointed. Should give the share price a nice boost today.

[jonwig] 02/10/2019 06:53

We are Questor's new 'tip of the year':



It follows Gervais Williams' recommendation:

Mr Williams said R&Q’s intermediary business had announced a series of new contracts recently: 14 in America with an estimated “gross written premium” of $238m (£194m), plus a further four worth $95m expected shortly, and 16 in Europe with a gross written premium of £281m plus a further six worth £52m expected soon.

“The company says it has a pipeline of further programmes with premiums of $400m a year to come,” the fund manager added. R&Q’s commission is typically 5pc of the premium.

“We expect the growth momentum to continue,” he said. “In time this side of the business will dominate, with its more regular and repeatable earnings growing into the future. We really like stocks like this with resilient growth prospects at a time when global growth is slowing.”

[speedsgh] 25/9/2019 08:27

A.M. Best rating -

Accredited's growth momentum continues following A.M. Best Group rating affirmation and increase in financial category size

Accredited Surety & Casualty Company, Inc. ('ASC'), the Florida-headquartered US insurance company that is licensed to write admitted P&C business throughout the US, has had its A.M. Best Group rating of A- (Excellent) affirmed and its financial size rating upgraded to IX ($250-$500 million) from VIII.

Accredited Insurance (Europe) Limited and its UK Branch also benefits from the enhanced rating from A.M. Best...

... The A.M. Best Group upgrade and rating affirmation will provide further support and growth momentum to ASC's focus on program underwriting on behalf of US MGAs. This is because, in addition to the AM Best A- (Excellent) financial strength rating, counterparties often require a minimum group rating. It is especially important in program underwriting partnerships where the financial strength rating of ASC is an essential indication of the balance sheet strength of the company and its ability to stand behind its commitments. With a IX group rating, ASC is now on par with its larger US competitors.

Ken Randall, R&Q Executive Chairman, commented: "We are delighted to receive the Group upgrade by AM Best. In two years, R&Q has become a leading provider of high-quality program underwriting capacity in both the US and Europe. Crucial to this offering is our AM Best A- (Excellent) financial strength rating which is a badge of confidence that our partners can have in R&Q's capital strength and has been a driving force in our growth."

Todd Campbell, ASC's President and CEO, commented: "The upgraded Group strength rating will generate yet more interest from prospective business partners keen to explore underwriting partnerships with Accredited in the US. We expect another positive impact as Accredited's unique offering - high quality, fully licenced and AM Best A- rated capacity - is clearly valued by our partners".

[jonwig] 13/9/2019 08:02

IC covers the results.

I missed this bit:

Joint founder and executive chairman Ken Randall says MGAs, which act as a “counter-balance to the lumpiness” of legacy business, could eventually contribute the lion’s share of income.

Conclusion:

The shares are trading at nine times forward earnings – a discount to the three-year historical average multiple. That rating does not reflect the group’s ample cash resources and the increasing diversity of its income stream. Buy.

[jonwig] 11/9/2019 08:11

Always good to get the ED reports, thanks!

forecast eps of 18.3p for FY19, falling to 15.9p in FY20. (Presumably the large legacy acquisition.) If PER is a useful measure, around 10x is too cheap. If NTA is your choice, it's been at a higher premium in the past.

[edmonda] 11/9/2019 07:48

Latest note can be seen here:

[speedsgh] 06/9/2019 17:33

jonwig - What struck me most when looking at the Investment Income & Other Income figures, apart from the obvious exceptional Investment Income in H1 2019, was how much Other Income has fallen away in the past couple of years. It is this that has impacted the drop in Total Income in FY17 & FY18. Not clear as to the reason for this but might it be linked to the simplification of the group's business model which resulted in the sale of certain non-core operations?

From Interim Results in Sept 2015:
"The Board is fully committed to improving the financial performance of the Group and has launched a review of the business aimed at simplifying the Group's business model to focus on core areas of profitable growth."

[jonwig] 06/9/2019 16:41

speeds - thanks for that table: some pretty volatile numbers.

I wonder if part of the investment income rise is down to the big cash influx seen mostly in H2 last and is now earning income. This cash will probably have come from the legacy acquisitions.

Not sure, as I haven't had much chance yet to study a pretty complex statement!

[speedsgh] 06/9/2019 15:47

Also interesting to look at flows of Investment Income & Other Income over the last 10yrs...

INVESTMENT INCOME
2019: H1 16,030 H2
2018: H1 2,620 H2 2,810 total 5,430
2017: H1 3,781 H2 4,406 total 8,187
2016: H1 5,935 H2 2,041 total 7,976
2015: H1 2,301 H2 -135 total 2,166
2014: H1 4,131 H2 1,495 total 5,626
2013: H1 1,776 H2 5,342 total 7,118
2012: H1 5,513 H2 6,483 total 11,996
2011: H1 5,618 H2 740 total 6,358
2010: H1 4,595 H2 3,935 total 8,530
2009: H1 3,624 H2 7,798 total 11,422

OTHER INCOME
2019: H1 4,412 H2
2018: H1 5,738 H2 6,222 total 11,960
2017: H1 3,644 H2 4,510 total 8,154
2016: H1 12,534 H2 12,309 total 24,843
2015: H1 24,093 H2 19,861 total 43,954
2014: H1 16,117 H2 23,443 total 39,560
2013: H1 21,830 H2 18,748 total 40,578
2012: H1 17,611 H2 18,498 total 36,109
2011: H1 13,241 H2 16,855 total 30,096
2010: H1 10,784 H2 12,786 total 23,570
2009: H1 6,702 H2 7,658 total 14,360

TOTAL INCOME (INVESTMENT INCOME + OTHER INCOME)
H1 2019: investment 16,030 other 4,412 total H1 20,442
2018: investment 5,430 other 11,960 total 17,390
2017: investment 8,187 other 8,154 total 16,341
2016: investment 7,976 other 24,843 total 32,819
2015: investment 2,166 other 43,954 total 46,120
2014: investment 5,626 other 39,560 total 45,186
2013: investment 7,118 other 40,578 total 47,696
2012: investment 11,996 other 36,109 total 48,075
2011: investment 6,358 other 30,096 total 36,454
2010: investment 8,530 other 23,570 total 32,100
2009: investment 11,422 other 14,360 total 25,782

[speedsgh] 06/9/2019 15:25

Yes, some interesting comments contained within the Investment Income section...

The investment performance was driven largely by a combination of the strong recovery of our equity portfolio, << which we have since exited >>...

We are focused on capital preservation and absolute return. As such, if we are not being paid to take risk then we will not take it just to chase yield. Our portfolio still contains a large proportion of cash and T-bills as we keep our powder dry for attractive opportunities and we believe we are well positioned to do so.

We expect a good performance in H2 2019, albeit at a lower percentage return compared to H1 2019.

[this_is_me] 06/9/2019 08:37

LOL; as long as they're counting the money!

[jonwig] 06/9/2019 07:26

Michael Smith retires as a director and says, "I wish the entire team and especially Ken and Alan, continued success in delivering value for shareholders and having fun at the same time."

So RQIH is a fun business - I'd imagined more like this ...

[this_is_me] 06/9/2019 07:25

A very impressive results statement. There are plenty of opportunities to profitably expand the business.

[jonwig] 06/9/2019 07:22

Interim results:



They seem to give the lie to the idea that the market "knew something" - they clearly didn't know the results would be this good! "This was an exceptional six months for the Group".

What I can't understand is that H1 PBT of £33.1m and eps of 19.22p means that "The Board expects that full year results for 2019 will be in line with market expectations". According to Sharecast these are for FY £42.2m and 18.4p!

Maybe looking at the Investment Income comments gives a clue to a lower H2 contribution?

Also NTA has risen to 133.2p from 123.6p at 31/12.

[red ninja] 21/8/2019 12:13

All sounds very positive in the Program Underwriting partnerships :-

[riverman77] 14/8/2019 18:06

The sell-off is very closely correlated with other more conventional insurers (e.g LGEN and DLG). I therefore see this as part of a general sector wide sell-off, rather than anything company specific. I took this as a good opportunity to buy a Brexit/recession proof business at bargain price.

[3800] 14/8/2019 12:29

"It's always worrying when a seemingly cheap share gets cheaper, but these markets are treacherous. I'll hold until I get a reason not to."

that can be the problem, sometimes its just more sellers than buyers other times someone knows something and by the time the info gets down to our level the share price has already taken a dive

[jonwig] 14/8/2019 11:48

Looking at the trades data for the past weeks, there might be a single seller, but I'm not experienced at assessing such things.

The research note (which I've linked to) by Capital Access on 4 July has a consensus forecast of brokers Shore, Numis and Eq Dev for 2019, '20 and '21:

PBT £41.5m £39.6m £47.3meps 19p 17p 21ppayout 9p 10p 12p


It's always worrying when a seemingly cheap share gets cheaper, but these markets are treacherous. I'll hold until I get a reason not to.

[lord gnome] 14/8/2019 09:20

I doubt the share price drop is anything company specific. I have several holdings with charts that look like this.

[red ninja] 14/8/2019 05:52

Jonwig
In last report income from this source was not huge so hopefully even at an increased amount should not have too much of a negative effect.

The interim should be out in months time hopefully they will steady the ship.

[jonwig] 13/8/2019 12:46

Ninja - yes, I'm puzzled, too. Their investment returns must be pretty poor at present - mostly government bonds and money-market funds. (2018: 1.2%, 2017: 1.6%.)

[red ninja] 13/8/2019 12:07

Looks like RQIH falling on low volume with the market generally.

I believe RQIH is better placed that most to thrive in Brexit due to its links to Europe/US. It should also hopefully thrive even if there as a Corbyn election win as it is headquartered abroad and has US shareholders.

I see from the previous note :-

"A key risk has appeared though - recent commentary the Federal Reserve suggests that we are no longer so obviously in a rising rate environment. Randall & Quilter has recently increased its exposure to floating rate notes, so a cut in rates could have a negative impact on investment income."

Also there is a prediction of more interest rate cuts.

[jonwig] 05/7/2019 18:49

The research note is quite interesting and doesn't have the usual format. They also explain the business in a clear, simple way - better than Equity Development. They did an earlier piece last year.

It's sponsored, of course.

[jonwig] 05/7/2019 12:51

A new research note (sponsored?). I haven't had time to read yet;

[edmonda] 10/5/2019 15:35

no wonder shares in RQIH have been doing well: a record deal, excellent results and infusion of further capital.

All discussed and the prospects for further growth outlined in new research note from Equity Development, freely available here: