London-based Randall & Quilter Investment Holdings said it has received approval from the Bermuda Monetary Authority for the registration of a Bermudian class 3 reinsurer R & Q Re (Bermuda) Ltd.

The new company, a wholly-owned subsidiary of the group, will solely provide intra-group reinsurance, assisting the structuring of future acquisitions and enhancing the returns derived from new and existing insurance company units.

Randall said it expects to capitalise R & Q Re (Bermuda) purely from internal resources, during the first quarter of 2008.

The group said it has used third-party reinsurers to support acquisitions in the past. It said the benefit of reinsuring with a group-owned entity is that it will reduce the economic value ceded to such third party reinsurers and achieve much greater flexibility in terms of reinsurance.

The class three approval enables reinsurance of subsidiary insurance companies and a limited capacity to underwrite third-party business, both subject to regulatory approval.

Chief executive officer and chairman Ken Randall said: "The additional funding available from our AIM listing has enabled us to establish a reinsurer sooner than would otherwise have been possible."