Randall & Quilter Sells R&Q Managing Agency to U.S. MedMal Insurer Coverys

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Randall & Quilter Investment Holdings Ltd. announced it has completed the sale of its Lloyd’s managing agency, R&Q Managing Agency Ltd. (RQMA), to Coverys, a provider of medical professional liability insurance based in Boston, Mass.

The agreement between R&Q and Coverys was first announced in June 2017 and was completed on Nov. 30, 2017 after receiving all the necessary regulatory approvals.

RQMA will be renamed Coverys Managing Agency Ltd.

As previously announced, the sale proceeds to be received in cash are $22.6 million, which, after costs and related incentive and other payments, will result in net proceeds to R&Q of £13.1 million ($17.3 million). This is expected to generate a gain of approximately £11.8 million ($15.6 million) over the group’s carrying value of RQMA.

RQMA is the managing agent for three syndicates:

Syndicate 1991 which writes niche SME property and casualty business with a capacity of circa £127 million ($167.8 million);
Syndicate 3330 which provides reinsurance-to-close and other reinsurance solutions for legacy business within Lloyd’s;
Syndicate 1110, the former ProSight syndicate, was placed into run-off in 2017. R&Q acquired ProSight’s corporate members in October 2017 and therefore participates on 100 percent of Syndicate 1110’s open years. R&Q said it has substantial adverse development reinsurance from a ProSight group company.

In addition, Coverys has gained in-principle approval from Lloyd’s to establish Syndicate 1975 which will be managed by RQMA. Syndicate 1975 is expected to commence underwriting on Jan. 1, 2018, will write both medmal insurance and healthcare reinsurance and will be exclusively capitalized by Coverys.

RQMA also provides back office support to Syndicate 2088; the syndicate managed by XL Catlin and backed by China Re.

The transaction with Coverys “is a key element of our strategy to focus on legacy acquisitions and the writing of quality program business, which is mostly reinsured to highly rated reinsurers,” said Ken Randall, R&Q chairman and CEO, in a statement.

“We have already demonstrated how Coverys and R&Q are able to continue working together through the approval process of turnkey Syndicate 1975 and the ongoing management of the run-off Syndicate 1110,” he said.

“We look forward to continuing to build this relationship and exploring further opportunities to work together in the future,” Randall continued. “We remain an active participant as regards legacy portfolios at Lloyd’s and have a pipeline of further opportunities which we hope enhance our collaboration with Coverys.”

“Coverys’ investment in the managing agency showcases our commitment to expand our activities to meet the needs of a changing market,” said Gregg Hanson, CEO and president of Coverys, in prepared comments. “This continued growth offers the ability to expand our sophisticated solutions space while leveraging the leadership team of the former RQMA. We are excited by the formation of our own syndicate, but remain committed to the provision of management to third party Lloyd’s businesses.”

“We look forward to continuing to build our relationship with Randall & Quilter Investment Holdings Ltd. as we explore opportunities to work together in the future,” said Hanson.

Source: Randall & Quilter/Coverys