Randall & Quilter Investment Holdings (R&Q) has launched Gibson Re, a collateralised reinsurer that will allow the non-life global speciality insurance company to support approximately US$2 billion of reserves.
Subject to regulatory approval, the legacy insurance sidecar will be domiciled in Bermuda and holds around $300 million of capital.
Gibson Re will also reinsure 80 per cent of all of R&Q’s new qualifying legacy transactions for a period of three years, while R&Q will participate in the remaining 20 per cent to ensure alignment of interest.
Assuming sidecar capital is fully utilised by 2023, R&Q expects a run-rate group fee income of more than $140 million, as well as group pre-tax operating profit of more than $90 million.
Gibson Re is designed to transform legacy insurance into a recurring fee-based business in line with the strategic update of R&Q, published alongside its results for the first half of 2021, to consolidate the firm’s specialisation in programme management and legacy insurance business.
Financial highlights for H1 2021 include a pre-tax operating loss of $23.5 million, which was reduced to approximately breakeven when including the underwriting profit of two signed legacy insurance transactions that are expected to close in the second half of 2021.
In total, R&Q’s legacy insurance completed eight transactions with a pipeline of over $1 billion of reserves.
The firm also reports programme management gross written premium of $890 million and fee income of $50 million, which marked year-on-year increases of 80 per cent and 135 per cent, respectively.
Looking to Q3 2021, R&Q cited the recent completion of an insurance business transfer in Oklahoma as promising for opening up a new avenue of US legacy business.
