R&q Insurance Share Discussion Threads

[red ninja] 16/3/2020 13:16

Yes, added a few today on that basis.

[alter ego] 16/3/2020 12:30

I take comfort from the fact that they know their own business better than anyone and are buying back their own shares.

[red ninja] 16/3/2020 09:25

A market statement would have helped assuming the company has no problem with it’s high grade security investments or run offs.

Otherwise looks like many investors will sell on a take no chances basis.

I note in the interims they stated :-

"We have overhauled our investment portfolio by disposing of almost all equity investments,"

However, they may have re-entered the markets as some equities must be resilient to the corona virus crisis, but be at very good value because of it.

[jonwig] 16/3/2020 08:06

Share repurchase program:

Randall and Quilter Investment Holdings Ltd. announces that from today until 27 April 2020 it will commence a programme to purchase up to £2 million of the Company's ordinary shares of 2 pence each.
The Programme will be funded by the Company's cash reserves. Any shares repurchased by the Company will be held in treasury.

Total shares is 201.1m.

[jonwig] 15/3/2020 12:29

Equities were 4% of its investments in 2018, so that's OK. but corporate bonds were 32% which is OK if they were investment grade (they don't say). The current market won't show in the 2019 figures, of course.

Any other factors? A recession may mean less new business for the program underwriting?

[alter ego] 15/3/2020 12:12

That's my take jonwig. So apart from general "sell everything" mood, is there anything else RQIH is vulnerable to? Haven't worked that out yet.

[jonwig] 15/3/2020 11:35

alter ego - thanks for that. So from this point of view, RQIH isn't much impacted, if at all. As we've seen they never give much detail about their individual deals.

[alter ego] 14/3/2020 16:03

jonwig, Red Ninja, re business interruption cover, there’s a item, in the Independant, which suggest Covid - 19 may not produce a large number of claims. See

[jonwig] 10/3/2020 11:52

As I suggested earlier, RQIH might just be getting dragged down by the sector, and we don't know much about what's under the bonnet of its policies.

[red ninja] 10/3/2020 11:49

Jonwig,

So presumably the pandemic (business interruption clause) is going to have a direct cost to the legacy runoff policies although what that cost will be is probably a bit intangible at this moment in time.

I mean Italy seems the worst affected country and I'm not sure what RQIH's exposure to that country will be if any.

[jonwig] 10/3/2020 11:20

Business interruption - insurance after a disaster such as a fire, earthquake, pandemic, failure to receive deliveries, etc.

[red ninja] 10/3/2020 11:15

Not sure what business interruption clauses would mean.

Most office workers can manage with the phone, e-mail, and skype.

Working from home is also possible if they have something like a citrix setup so not sure if they would be badly affected by business interruption clauses.

[jonwig] 09/3/2020 06:41

IC has an article about weakness in the general insurance sector mostly business interruption clauses, travel) and has a chart:



So that, presumably, is why this share is weak. Whether it has any specific issues we'll have to wait and see (FY results end-April, and they don't seem to dotrading updates).

[red ninja] 06/3/2020 10:39

Strangely there seems no really volume for sale at 150 on the HL platform.

I just tried and can only buy 3 otherwise I have to set a limit order.

[jonwig] 06/3/2020 10:28

Yes, could be US holders taking money home. They seem to do that when they panic.

Net result could be stronger USD (though it's been weak recently). And I don't see how this business can be affected, either. Companies in trouble will be more willing to get rid of captives.

[red ninja] 06/3/2020 10:15

I see the price has taken another step downwards.

I seem to recall that the last fund raising was sold to US investors ?
I wonder if this is US investors selling off stock in a state of panic from US market falls yesterday.

To me it seems this share is safer than most as the legacy run off business is not really related to how the economy is doing.

[riverman77] 29/2/2020 11:24

Unless they've completely changed their positioning since then, it should be a case of reinvesting any matured bonds into similar instruments, probably at a slightly lower yield. The downside on short dated, investment grade FRNs should be pretty minimal so not too concerned with investment losses.

[jonwig] 29/2/2020 07:24

riverman - the 2018 AR says that 74% of their investment portfolio has a duration of less than 2 years, and the largest single investment type is US floating rate notes. (The total return was 1.2%, or 0.9% on a different measure.)

Such a portfolio needs continuous turnover and replacement at ever-lower interest rates. It will be interesting to see how the 2019 returns compare. (Results due in April.) The worries are really about 2020 returns, and I guess equities will be irrelevant.

[riverman77] 28/2/2020 19:58

I remember reading in a recent report that they had significantly de-risked the investment portfolio, i.e cut most of their equity exposure and mainly in highly rated credit (I think they give a breakdown if you need more details) - if that's still the case then the portfolio should be holding up OK.

[lord gnome] 28/2/2020 19:07

Yes, good point.

[jonwig] 28/2/2020 18:45

Maybe investment returns will be a problem: it's happened before I think.

[lord gnome] 28/2/2020 18:37

It was walked up on relatively small volume and it's fallen back on even less. It's a thinly traded stock where movements become exaggerated. Nothing fundamental has changed. Normal service will be resumed in due course. I would add more, but my cash is limited and the current range of options to buy good quality stocks at bankruptcy sale prices is just too great. I'm spoilt for choice.

[alter ego] 28/2/2020 16:22

Thanks Jonwig, thought I must have missed something as you've echoed my own thoughts. Agree the spike was a bit OTT but that's what a national newspaper tip does for the share price

Added some today. Happy to sit back and collect the dividends/return of capital.

[jonwig] 28/2/2020 16:18

Can't think of one!

The legacy business ought to benefit: companies having problems more likely to ditch their captives.
Program underwriting? Can't see how the volume of insurance business will fall.

Folks just sell stuff in markets such as this. (But the spike to 224p was a bit improbable.)

[alter ego] 28/2/2020 15:37

Down about 30% since year high of 224. What's the possible impact of Covid-19 on this business?