The board of R&Q Insurance Holdings Ltd, the Bermudian-headquartered global non-life specialty insurer, is reviewing strategic options to separate its programme management business, Accredited, and its legacy insurance business.

The company said Accredited has grown significantly over the past three years, achieving record gross written premium and fee income (excluding minority stakes in MGAs) of $1.8 billion and $80 million, respectively, in 2022. It is now one of the largest programme managers globally.

Accredited relies on an “A” credit rating to conduct business and historically relied on the financial strength of the broader group to obtain its credit rating.

However, given Accredited’s current size and scale, R&Q said, it believes it is in the best interests of R&Q’s shareholders for Accredited to stand on its own.

The legal reorganisation is subject to regulatory and lender consents, which R&Q expects to obtain in the second quarter of this year.

The company released a preliminary fiscal year 2022 trading update.

Based on preliminary and unaudited information, R&Q anticipates that it will realise a pre-tax operating profit (loss) for the financial year of $(30)-(40) million, comprising $55-60 million in programme management, $(55)-(60) million in legacy insurance and approximately $(35) million in corporate and other, which is primarily interest expense.

William Spiegel, chief executive officer, said Accredited currently partners with MGAs to offer over 80 different insurance programmes and has over 200 reinsurance partnerships.

He added: “In legacy insurance, we continue to focus on transitioning to a fee-based and capital efficient model and remain confident that this will create a more profitable, sustainable and valuable business.”

Due to the planned separation, R&Q said it expects to announce final audited results in June.