5 February 2018Analysis

AM Best assigns rating to R&Q subsidiary for European captives

Ratings agency AM Best has assigned a financial strength rating of A- (Excellent) to R&Q Insurance (Malta) (RQIM), a run-off specialist for European non-life re/insurers and captives.

The outlook of RQIM is stable, and reflects its balance sheet strength, which AM Best categorises as strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.

AM Best suggested the ratings also benefit from one-notch of life from its parent company, Randall & Quilter Investment Holdings (RQIH).

RQIM has generated an adequate operating performance over the past four years (2013-2016), with an average return on equity of 5.3 percent.

Although the ratings agency expects the company to report a marginal profit in 2017, the expansion of programme business is expected to strengthen its prospective profitability. The company’s risk-adjusted capitalisation is likely to remain supportive of its strong balance sheet strength assessment, which also benefits from a low level of financial leverage and is offset by an increasing dependence on reinsurance.

Commenting on this development, R&Q CEO Ken Randall said: “We are delighted that AM Best has recognised the quality of R&Q’s balance sheet, our group risk and operational management and our new, strategy focussed around two core offerings: legacy acquisitions and programme management.

“The A- rating for our European insurance company, R&Q Malta, is an important step in our new strategy and gives our customers and counterparties even greater confidence in our ability to meet their needs in providing solutions to exiting run-off business and in being their programme underwriting partner of choice.”

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