(Alliance News) - R&Q Insurance Holdings Ltd on Tuesday outlined plans for the future of its Legacy business, as it continues to work towards completing the sale of Accredited to Onex Corp.
Shares in R&Q were up 4.6% at 11.50 pence in London on Tuesday afternoon.
The Hamilton, Bermuda-based non-life specialty insurance company first announced the sale of Accredited for USD465 million in late October. On Tuesday it said it continues to work towards satisfying the deal's conditions, and expects to close the sale early in the second quarter of 2024 at the latest.
In a presentation to investors, R&Q detailed its plans for R&Q Legacy as a standalone business. It said the current pipeline contains over USD850 million in reserves, and that during the current year over 50 deals representing over USD3.5 billion of reserves passed the initial suitability screening.
R&Q said its strategic priorities for Legacy include growing its fee income, and that it plans to double fees in 2025 compared with annualised results in the first half of the current year.
Also by 2025, it intends to reduce operational expenses by between 15% and 20%, and is "focused on making the business more automated, efficient and scalable". Finally, R&Q said it will prioritise de-risking Legacy's balance sheet and minimising volatility, including through sales of non-core assets and legacy liabilities, with execution planned for next year.
R&Q said that as a result of these plans, it expects the re-focused business and strategy to deliver operating profitability by 2025.
R&Q also said Legacy has substantial opportunities to generate excess capital for future deployment. Based on anticipated claims payment patterns, it expects to generate over USD100 million in cumulative surplus capital over the next five years approximately.
By Emma Curzon, Alliance News reporter
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