AM Best confirms credit ratings of Randall & Quilter Investment Holdings Ltd. and its subsidiaries


LONDON– (BUSINESS WIRE) –
AM Best confirmed the financial strength ratings of A- (excellent) and the long-term issuer credit ratings (long-term ICR) of “a-” (excellent) of Accredited Surety and Casualty Company, Inc. (ASC) (Orlando, Florida), Specialized accredited insurance company (UPS) (Phoenix, Arizona) and Accredited Insurance (Europe) Limited (AIEL) (Malta). At the same time, AM Best confirmed the long-term ICR of “bbb-” (Bon) of Randall & Quilter Investment Holdings Ltd. (R&Q) (Bermuda) [AIM: RQIH]. The outlook for these credit ratings (ratings) is stable. ASC, ASI and AIEL are 100% subsidiaries of R&Q.

ASC, ASI and AIEL ratings reflect the strength of R&Q’s consolidated balance sheet, which AM Best considers to be very strong, as well as R&Q’s adequate operational performance, neutral business profile and management. appropriate business risk. The rating of R&Q as a non-operating insurance holding company is determined by reference to R&Q’s credit rating on a consolidated basis and the normal subordination of the creditors of the holding company to policyholders of the operating company.

From AM Best’s perspective, ASC, ASI and AIEL are strategically important and integrated within the R&Q group. These companies are essential to the growth of the group’s program activities, providing insurance services to General Agents (MGAs), and in addition, they hold essential licenses for the group’s core program and business activities. traditional in United States and Europe.

R & Q’s assessment of balance sheet strength is supported by the risk-adjusted capitalization, which was at its highest level at the end of 2020, as measured by the capital adequacy ratio (BCAR) of Best, and should stay at this level prospectively. Gibson Re Ltd, a sidecar that will accept 80% of all new existing business on a quota basis for a period of three years, was established in the fourth quarter of 2021. The divestments to Gibson Re are expected to significantly reduce the capital requirements of underwriting of R&Q arising from news of traditional businesses and moderate forward-looking volatility in risk-adjusted capitalization and operating results over the next several years.

R&Q has shown good financial flexibility in recent years, thanks to frequent increases in capital and debt. Gibson Re supplies R&Q with approximately $ 300 million of committed capital from third parties to support an estimate $ 2 billion historical transactions for the next three years (gross of R&Q retention). The group has expressed interest in establishing other sidecar structures in the future. However, AM Best notes that the refinancing risk arises once Gibson Re stops accepting new business after this initial three-year period.

R&Q relies on reinsurance due to the high level of cessions associated with its program activities and prospectively, with cessions to Gibson Re. R&Q mitigates its credit risk and reinsurance litigation through close management of its reinsurance panel and the use of collateral when the counterparties are not well rated.

R & Q’s historical profitability has been good, with a five-year (2016-2020) weighted average return on equity of 9.5%, although subject to volatility over the same period. AM Best expects the short-term operational performance of R&Q to remain adequate; however, the creation of Gibson Re is expected to reduce profitability initially, as 80% of day one underwriting earnings will go to the sidecar. Once the reserves in the sidecar have reached scale, the revenues from the management of the sidecar by R&Q are expected to represent an increasing share of the overall operating profits, in addition to the revenues generated by the activities of R&Q. growing program of the group. While AM ​​Best expects the historical segment of R&Q to show less earnings volatility in the future, due to the shift to Gibson Re’s commission income and lower underwriting exposures, AM Best Note that segment performance remains sensitive to legacy transaction flows.

This press release relates to credit ratings published on the AM Best website. For all rating information relating to the publication and relevant disclosures, including details of the office responsible for the publication of each of the individual ratings referenced in this publication, please see AM Best Recent rating activity Web page. For more information on the use and limits of credit rating opinions, please see Best Credit Score Guide. For more information on the proper use of Best’s credit scores, Best’s preliminary credit reports, and AM Best’s press releases, please see Guide to Proper Use of Best Ratings and Reviews.

AM Best is a global credit rating agency, news publisher, and data analytics provider specializing in the insurance industry. Based at United States, the company operates in more than 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico. For more information visit www.ambest.com.

Copyright © 2021 by AM Best Rating Services, Inc. and / or its affiliates. ALL RIGHTS RESERVED.

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William Keen Tomlinson
Senior Financial Analyst

+44 20 7397 4395

[email protected]

Alex rafferty
Associate Director, Analytics

+44 20 7397 0312

[email protected]

Christophe sharkey
Manager, Public Relations

+1 908 439 2200, ext. 5159

[email protected]

Jim peavy
Director, Communications

+1 908 439 2200, ext. 5644

[email protected]

Source: AM Best

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