Randall & Quilter reports record pre-tax operating profit
Randall & Quilter Investment Holdings Ltd has reported record pre-tax operating profit of £16 million ($22.6 million) in 2020.
R&Q said its profit, an increase of 102 per cent, reflected a year of accelerated growth across both of its business segments.
The Bermudian-based company reported fee income of £18.8 million, an increase of 89 per cent, representing 17 per cent of gross operating income.
Operating earnings per share were 5.9 pence (8.3 cents), an increase of 38 per cent.
The company reported a profit before tax of £30.2 million, a decrease of 21 per cent, which it said reflected a reduction in net intangibles due to the mix of legacy insurance transactions.
The company said its programme management sector was profitable for the first time, earning a pre-tax operating profit of $3.4 million, a 14.3 per cent margin, demonstrating the operating leverage benefits of increased scale.
R&Q said 18 new programmes were signed, increasing total programmes to 48, driving a 46 per cent increase in gross written premium to $538.9 million.
The company said it is on course to achieve its previously announced target of at least $1.5 billion of gross written premium in 2023.
The company said its legacy insurance segment had a record year, executing on 19 deals and delivering a 46 per cent increase in pre-tax operating profit to £38.1 million.
The company said legacy insurance business continues to be written at attractive returns with operating return on tangible equity of 14.8 per cent and a five-year average return of 20.2 per cent.
R&Q said capital remained strong with a preliminary group solvency ratio of 202 per cent versus a target of 150 per cent.
The company announced a final cash dividend of 0.2 pence per share for a total cash distribution for the year of four pence per share.
R&Q announced a new progressive dividend policy with a payout ratio of 25-50 per cent of pre-tax operating profit, a proxy of cash earnings, reflecting current growth opportunities and a balance of reinvesting and growing dividends.
It intends to grow its annual dividend from 4 pence per share.
During the year, the company said £173 million of capital was raised for growth.
It added that the company’s senior leadership was strengthened with key hires including executive chairman, group CFO, CEO of US programme management, and chief human resources officer.
R&Q said it expanded its footprint and capabilities by launching its US E&S programme management business, and increased exposure to fee-related profits through investment in Tradesman, an MGA to whom it provides programme management services.
Providing an update on the first quarter of 2021, the company said its programme management business segment increased gross written premium by 52 per cent to $185.2 million, and fee income by 91 per cent to $9.7 million, compared with Q1 2020.
It launched five new programmes increasing active programmes to 52 and contracted premium to $1.4 billion.
The company said its legacy insurance segment completed one deal and has five more under exclusivity representing £150 million of net reserves.
R&Q said it is witnessing a strong level of activity for a business that is historically busier in the second half of the year.
The company said its Tradesman EBITDA increased by 140 per cent to $4.8 million, compared with the first quarter of 2020.
R&Q is a non-life global specialty insurance company focusing on programme management and legacy insurance businesses.
Headquartered and operating in Bermuda with extensive operations in the US and Europe, it provides finality solutions for run-off portfolios and global programme capacity for MGAs and their reinsurers.