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R&Q Investment Holdings Ltd., Hamilton, Bermuda, on Friday said it is selling its Lloyd’s of London managing agency business to medical professional liability insurer Coverys for $22.6 million.
R&Q Managing Agency Ltd. manages syndicate 1991, which has capacity of approximately £127 million ($162.3 million) and writes property/casualty business for small and medium-size enterprises, mainly through delegated underwriting authorities, R&Q said in a statement. In addition, the agency provides back-office support to syndicate 2088, which is managed by XL Group Ltd.
The agency also manages syndicate 3330, which provides reinsurance-to-close and other reinsurance solutions for legacy business within Lloyd's. R&Q will have a management agreement with Boston-based Coverys to provide continued support after the sale.
After costs and related incentive payments, the sale is expected to net R&Q proceeds of £13.9 million ($17.8 million), the statement said.
The sale follows R&Q’s strategy to focus on its core, high growth activities including the acquisition/assumption of runoff portfolios together with the use of its licensed companies in the U.S. and E.U. as conduits for property/casualty business, primarily to highly rated reinsurers, the statement said, adding the proceeds of the sale will be used to help finance the growing legacy transaction pipeline.
"The proposed sale of our Lloyd's managing agency is a significant milestone in the Group's decision to simplify its operations and focus on our core areas of legacy acquisitions and management and the provision of services to our live underwriting partners,” Ken Randall, R&Q chairman and CEO, said in the statement.
The sale remains subject to regulatory change of control approval by Lloyd’s and the U.K.’s Prudential Regulation Authority, expected to be received in late 2017, according to the statement.
“We are excited to enter the London marketplace and will look to RQMA’s industry knowledge and expertise to guide us in this prestigious market.” Gregg L. Hanson, CEO and president of Coverys, said in the statement. “The acquisition additionally allows Coverys to assist new underwriting syndicates that seek to launch their business at Lloyd’s.”
U.K.-based insurers Beazley P.L.C., Talbot Underwriting Ltd. and Chaucer P.L.C. have partnered to form a political risk consortium in Asia offering increased capacity for political and contract frustration risks, Asia Insurance Review reported. The insurers will provide capacity of up to $130 million for individual risks, with a policy period of up to seven years, through the new Lloyd's consortium based in its Singapore hub.