R&Q Insurance Regulatory News (RQIH)

Randall & Quilter Investment Holdings Ltd.

Acquisition

23 December 2016

Randall & Quilter Investment Holdings Ltd ('R&Q' or 'the Group') is pleased to announce that it has signed an agreement to acquire, subject to a pre-completion capital restructuring and to change of control approval from each of the PRA and FCA, the entire issued share capital of AstraZeneca Insurance Company Limited ('AZICO') ('the Company') from its owners AstraZeneca UK Limited. AZICO was formed in 1994 as the UK registered captive insurer for AstraZeneca. It ceased active underwriting in 2004. The pre-completion capital restructuring is expected to take place within the same timeframe as the regulatory approval process.

The residual liabilities comprise primarily of UK Employers' Liability. AZICO had gross claim reserves as at 31st December 2015 amounting to £15.7m. The consideration payable by R&Q, in cash from existing resources and its bank facility with RBS, will depend on the outcome of the capital restructuring but will be between £10.2m to £34.6m. This represents a small discount to the Company's anticipated post-capital restructuring net assets of £12.9m to £37.9m. In the year to 31st December 2015 no profit or loss was attributable to the assets of the acquisition.

The Company will be managed by R&Q with the intention of undertaking a Part VII Transfer of the remaining insurance business to one of the Group's consolidation vehicles, subject to the usual regulatory and Court approvals, in due course.

Commenting on today's announcement, Ken Randall, Chairman and Chief Executive Officer of Randall & Quilter, said:

"We are pleased to have entered into an agreement to acquire AZICO from AstraZeneca UK Limited.

This is the second transaction that we have concluded with AstraZeneca to assist them exiting their captive insurance companies in run-off and further demonstrates the attractions of the Group's offerings to major corporations."

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About R&Q

Randall & Quilter pursues a buy and build strategy and has created a comprehensive range of investment activities and services in the global non-life insurance market.

R&Q is focused on the following three core areas:

· Insurance Investments

· Insurance Services

· Underwriting Management

The Group:

· provides a range of services to both the live and legacy (re)insurance markets to support growing businesses and address complex and challenging run-off issues;

· employs close to 400 insurance professionals based in the UK, US, Bermuda, and Europe with wide service capability in both the 'live' and 'run-off' markets;

· owns and manages a portfolio of insurance companies, both active and in run-off, in the UK, US and Europe with net assets of £123.7m as at 31 December 2015;

· owns an admitted P&C Insurer, A- rated by AM Best, with licenses throughout the US; owns a Bermuda Class 3A insurance company which currently supports the Group's syndicate participations;

· launched Syndicate 1991, which commenced underwriting from January 1, 2013 and has an agreed capacity of £130m for 2016, manages one RITC ('run-off') syndicate, 3330, and owns and operates an MGA platform;

· acquires and manages a portfolio of insurance receivables, with a carrying cost of £6.0m as at 31 December 2015, of which R&Q holds a 50% interest

The Group was founded by Ken Randall and Alan Quilter in 1991.

Website: www.rqih.com