Randall & Quilter (R&Q) has completed the sale of its Lloyd’s managing agency, R&Q Managing Agency (RQMA), to Coverys.
As part of the acquisition, RQMA will be renamed as Coverys Managing Agency.
On completion, a cash payment by Coverys of $22.6 million will be paid to R&Q, which, after costs and related incentive payments, will result in estimated net proceeds of £13.1 million.
R&Q expects to generate a gain of $11.8 million over the group’s carrying value of RQMA.
The net proceeds of the sale will be deployed to help finance R&Q’s legacy transaction pipeline, especially in the US and Lloyd’s, and to generate valuable commission income from the use of Malta’s direct licenses.
The managing agency was formed in 2003 to handle run-off business, and in 2010 it was approved as an agency to manage live syndicates.
RQMA’s core business is the management of Syndicate 1991, which writes niche small and medium-sized enterprise property and casualty business, mostly through delegated underwriting authorities.
It also manages Syndicate 3330, which provides reinsurance to close and other reinsurance solutions for legacy business within Lloyd's.
Ken Randall, R&Q chairman and CEO, commented: "We are pleased to have concluded this transaction with Coverys which 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.”
Gregg L Hanson, CEO and president of Coverys, said: “Through the acquisition, Coverys will inherit the continued responsibility to support the syndicates currently under management with RQMA. The acquisition additionally allows Coverys to assist new underwriting syndicates that seek to launch their business at Lloyd’s, while also maintaining business operations for existing syndicates.”