AM Best Affirms Credit Ratings of Randall & Quilter Investment Holdings Ltd. and Its Members
20 September 2019 - 2:24AM
Business Wire
AM Best has affirmed the Financial Strength Ratings of A-
(Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR)
of “a-” of Accredited Surety and Casualty Company, Inc. (ASCC)
(Orlando, FL) and Accredited Insurance (Europe) Limited (AIEL)
(Malta). Concurrently, AM Best has affirmed the Long-Term ICR of
“bbb-” of Randall & Quilter Investment Holdings Ltd. (R&Q)
(Bermuda). The outlook of these Credit Ratings (ratings) is
stable.
The ratings of ASCC and AIEL reflect the consolidated balance
sheet strength of R&Q [AIM: RQIH], which AM Best categorises as
very strong, as well as its adequate operating performance, neutral
business profile and appropriate enterprise risk management. The
rating of R&Q, as a non-operating insurance holding company, is
determined by reference to the credit assessment of R&Q on a
consolidated basis, and the normal subordination of holding company
creditors to operating company policyholders.
As wholly owned entities of R&Q, ASCC and AIEL are
strategically important to and integrated within the Randall &
Quilter group (collectively referred to as the group). They are
pivotal to the group’s growing program business, providing
insurance services to managing general agents (MGA), and hold
essential licences for legacy business in the United States and
Europe.
The group’s balance sheet strength is underpinned by its
risk-adjusted capitalisation being at the strongest level, as
measured by Best’s Capital Adequacy Ratio (BCAR). Risk-adjusted
capitalisation was bolstered by a GBP 103.5 million capital raise
during 2019, which is expected to be utilised fully by business
growth over the longer term. Financial leverage was elevated at
year-end 2018, at approximately 46%; however, the subsequent
capital raise reduced this significantly, and financial leverage is
expected to be approximately 34% at year-end 2019.
Offsetting rating factors include execution risk relating to the
successful growth of R&Q’s programme business, which involves
the group providing fronting services to MGAs, along with
increasing dependence on reinsurance as this programme business
grows. Operating performance remains adequate, with the group
reporting robust profitability in recent years and a five-year
weighted average return on equity of 4.4% (2014-2018). AM Best
expects that R&Q’s strong position in the small and
medium-sized run-off market will enable it to generate a flow of
profitable new business over the coming years.
This press release relates to Credit Ratings that have been
published on AM Best’s website. For all rating information relating
to the release and pertinent disclosures, including details of the
office responsible for issuing each of the individual ratings
referenced in this release, please see AM Best’s Recent Rating
Activity web page. For additional information regarding the use and
limitations of Credit Rating opinions, please view Understanding
Best’s Credit Ratings. For information on the proper media use of
Best’s Credit Ratings and AM Best press releases, please view Guide
for Media - Proper Use of Best’s Credit Ratings and AM Best Rating
Action Press Releases.
AM Best is a global credit rating agency and information
provider with an exclusive focus on the insurance industry. Visit
www.ambest.com for more information.
Copyright © 2019 by A.M. Best Rating
Services, Inc. and/or its affiliates. ALL RIGHTS
RESERVED.
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William Keen-Tomlinson, ACA Financial Analyst
+44 20 7397 4395 will.keen-tomlinson@ambest.com
Tim Prince Director, Analytics +44 20 7397
0320 timothy.prince@ambest.com
Christopher Sharkey Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com
Jim Peavy Director, Public Relations +1 908 439
2200, ext. 5644 james.peavy@ambest.com
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