Randall & Quilter Investment Holdings Ltd. (R&Q) announced it has reached agreement with ProSight Specialty Insurance to novate the management of Syndicate 1110 to R&Q Managing Agency Ltd. (RQMA).
Day-to-day claims handling on non-U.S. business will be outsourced to R&Q Central Services.
At the same time R&Q will acquire, for a nominal sum, the 100 percent shareholding of the ProSight corporate members: ProSight Specialty (TSMC) Ltd. (TSMC) and ProSight Specialty (ECUCM) Ltd. (ECUCM), which provide capital support to Syndicate 1110.
ProSight will continue to meet funds-at-Lloyd’s obligations with respect to Syndicate 1110 until a reinsurance to close is completed by R&Q in early 2020, explained R&Q.
ProSight has the option of requiring R&Q to provide up to 30 percent of the funds at Lloyd’s with four months’ notice in exchange for annual payments to cover R&Q’s cost of capital.
Based upon current expectations, the amount of funds at Lloyd’s that could be required by R&Q is circa £9.4 million ($12.3 million), the majority of which would be sourced from external funding providers, R&Q said in a statement.
As part of ProSight’s exit from Lloyd’s, all of S1110’s reinsurance of ProSight’s U.S.-based insurance companies was commuted. Further, business sourced by ProSight coverholder ProSight Specialty Insurance Solution to S1110 is being reinsured back to the ProSight Group via 100 percent quota share reinsurance provided by ProSight’s subsidiary New York Marine and General Insurance Co. (NYMG), which is A- rated by AM Best.
S1110 will also have the benefit of an aggregate stop loss reinsurance on the non-U.S. business by NYMG in excess of current syndicate reserves of circa £76 million ($99.8 million).
R&Q, as owner of the corporate members, will have the benefit of 75 percent of any future reserve savings, with ProSight retaining a 25 percent profit interest.
Subject to regulatory approvals, R&Q will also acquire ProSight Specialty Underwriters Ltd. (PSUL) and ProSight Specialty Managing Agency Ltd. (PSMAL). PSMAL will be de-authorized ahead of the completion of the acquisition by R&Q.
The consideration payable will be equal to the tangible net asset value of the two companies, approximately £1.1 million ($1.4 million), which will be satisfied in cash, said R&Q.
Commenting on the transaction, Ken Randall, chairman of R&Q said, “Our appetite for using our expert claims administration skills in the run-off of legacy Lloyd’s portfolios continues and this transaction is evidence of that. The ongoing collaboration with RQMA and Coverys, its proposed new owners, provides R&Q with continued access to the infrastructure required to manage syndicates with legacy business and we look forward to completing further transactions as the pipeline in this segment continues to grow.”
ProSight CEO Joe Beneducci commented: “We are pleased to have completed this transaction enabling us to recapture our well performing U.S. book of business and also retain a profits interest on the UK portfolio. We look forward to working together with R&Q on the run-off of the UK book.”
Source: Randall & Quilter Investment Holdings Ltd.
Was this article valuable?
Here are more articles you may enjoy.