R&q Insurance Share Discussion Threads

[lord gnome] 17/10/2020 15:31

Thanks jonwig. I have PM'd you as requested.

[jonwig] 17/10/2020 12:29

Capital Access Group has produced a nine-page (positive) report on the results.
They repeat that the investment returns will reverse in H2, and on my concern about the large technical provisions they say:

In 1H20 the biggest drivers were the increase in Receivables and a significant increase in technical provisions, which result from uncertainty in the long tail liabilities of the portfolios in run-off in Legacy. These liabilities can change significantly when reviewed, which appears to have happened during H1. The risks include asbestos, pollution, health hazard and other US liability insurance, claims for which are typically not settled for years after policies have been written.
Which doesn't really help much, as we knew that!
The best take I think is that they're bringing forward future losses and some of them might be reversed.

I got the report from Research Tree. If anyone wants a copy, PM me with your email address. I'll send it from Monday onwards.

[jonwig] 14/10/2020 19:40

Yes, they explain the statutory figures by the investment returns which are reversing. no mention of the provisions.

Also point out that program underwriting is now profitable.

[lord gnome] 14/10/2020 18:12

FWIW, IC has today raised its rating of RQIH from Hold to Buy.

[riverman77] 14/10/2020 12:16

The investment returns accounts for some of it, but the bigger part seems to be how the new acquisitions are treated from an accounting perspective. Last year, the company saw an immediate uplift from one of the big acquisitions purchased at a discount. This year, it seems the gains will feed through over future years. Importantly, the company states they still target the same returns (over 15%). I think you just have to accept that returns will be lumpy, but should be strong in the long term.

The investment returns don't concern me as they will just be mark to market movements in the bond prices. As long as the bonds don't default these will reverse. The portfolio is very high quality/credit rating, so I think the risk of defaults is extremely low.

[red ninja] 14/10/2020 11:49

The results look good on an operating basis ie the legacy and program management.

RQIH can be adversely affected in volatile times by investment returns and thus it was this time ie "However, as a consequence of negative market reactions to the economic uncertainty that prevailed during the early months of the pandemic, we recognised £(7.1) million of net realised and unrealised Losses in H1 2020".

Sound like some of that will be reversed ie a "substantial" amount.

Maybe, a lot of short term money was buying the stock looking for a quick return in the last few weeks and maybe it is that money which has sold out today.

I must admit the "investment returns" part concerns me on this business.

[geraldus] 14/10/2020 11:33

More patience required by the look of it.A divvy in the meantime.

[jonwig] 14/10/2020 08:43

My reading is that these provisions arise from Legacy transactions, and measure expected losses over a "long tail" of claims, calculated using Solvency II rules.
Were these adjustments to earlier numbers (in which case why so large) or from new legacy deals (but they dwarf recent negative goodwill profits)?

Or shouldn't we bother, because they will be reversed when future losses are incurred?

It looks like the market would have liked a bit more, too.

[lord gnome] 14/10/2020 07:43

Yes, jonwig. Narrative is very positive but clearly, my reading of the numbers is leaving something to be desired. I feel the need for an interpreter.

[jonwig] 14/10/2020 07:38

Interim results:



Narrative reads well, and a restored cash distribution (3.8p, late Nov).

Part of profits fall is down to lower investment returns (being reversed, so OK).
But what about "Movement in gross technical provisions" which has gone from £(81)m to £(300)m? The extent of this shift isn't explained. Or have I missed something? Quite possibly.

[geraldus] 13/10/2020 17:39

The time has come this weekto see what RQIH is capable of apart from being Covid proof.

[alter ego] 13/10/2020 12:14

"Randall & Quilter Investment Holdings Ltd.

Accredited announces new program underwriting partnership with Attune Insurance

13 October 2020

Accredited Surety and Casualty Company, Inc. ("Accredited"), a wholly owned subsidiary of Randall & Quilter Investment Holdings Ltd. ("R&Q") and a Florida domiciled insurance company licensed in all 50 states to write admitted business, is pleased to announce that it has entered into a new program partnership with Attune Insurance ("Attune"), which is a program administrator and has specific experience in commercial insurance programs, currently managing a Business Owners' Policies (BOP) program with over $100M in written premium in 2019. "

source.

[red ninja] 13/10/2020 12:08

New underwriting partnership :

"Alan Quilter, R&Q Group CEO, said: ''This is an exciting new partnership with a significant sized account and we look forward to a growing relationship with the Attune team. Working with Attune is further evidence of our commitment to supporting high quality program business, with superior MGAs, across the US and highlights the important role that Accredited plays in this arena."

[petomi] 13/10/2020 09:25

Results due tomorrow ("on or arounmd 14 October"). There has been a lot of positive newsflow and if they can pay a decent cash interim divi, rather than the more notional scrip divi at year end, this could take a serious step up.

GLA

[geraldus] 09/9/2020 16:02

Non reg RNS today.Heavyweight brought into run the E&S division stateside.Have high hopes for this.Mid October for results.

[red ninja] 08/9/2020 11:53

Another legacy agreement :-

[red ninja] 26/8/2020 11:34

Looks like another good move for program management and see a couple of 100 k buys today.

Presumably this news flow is helping J O HAMBRO CAPITAL MANAGEMENT LIMITED sell some more of their holding.

[geraldus] 26/8/2020 07:14

Non-reg RNS out this morning.Stateside rollout.

[red ninja] 21/8/2020 09:40

Well World Marine & General Insurance Company has been in runoff since 2001 so that suggest it is the rump of the fund left to run off. Inceptum Insurance Company was placed in runoff in 2009 also suggests it is the rump of the fund left to run off.

They do sometimes mention a legacy runoff's size ie Grobal Re their largest to date was $80 million. I believe normally the run offs they have acquired have been small to medium which would seem the case this year as they I don't seem to remember them telling us any of them are large.

They raised 100 million at the disappointing price of £1.35 a share earlier this year so I don't believe they are in urgent need of funds.

Hopefully the next placing will be at a higher price otherwise it will tend to inhibit share price growth.

[geraldus] 20/8/2020 20:10

Well,with all these acquisitions on the way,will they passing the hat around for what must be a fifth time,I've lost count.

[edmonda] 20/8/2020 12:20

Yes - a busy week for them ! But underpins forecasts and evidences the scale of opportunities out there for RQIH

As noted above , Equity Development update out , following thorough analysis published in July. Free access here

[speedsgh] 20/8/2020 11:24

Latest Equity Development research note...

Strong Program growth, healthy Legacy pipeline -

[jonwig] 20/8/2020 07:16

Another!



About the tenth this year.

[red ninja] 19/8/2020 09:13

Numis: Randall & Quilter ahead on long-term targets
Investment business Randall & Quilter (RQIH) is on track to hit its long-term targets and Numis says there is ‘significant future value creation’.

Analyst Nick Johnson retained his ‘buy’ recommendation and target price of 190p on the shares, which were trading at 156p yesterday.

Johnson said the group’s new underwriting deal with MGA was displaying ‘strong momentum’ leading to a ‘further material increase in scale’ and it had also brought forward its planned entry into the US ‘excess and surplus’ reinsurance market to the fourth quarter of this year.

‘We think Randall & Quilter is firmly on track to achieve its longer term goal of $1.5 to $2bn of contracted annual premium income by 2022/23, which forms the basis of significant expected future value creation from high quality recurring commission revenues,’ he said.

hxxps://citywire.co.uk/funds-insider/news/the-expert-view-marks-and-spencer-persimmon-and-capita/a1391731