William Spiegel, R&Q
12 June 2023Analysis

R&Q announces capital raise

Non-life global specialty insurance company R&Q Insurance Holdings has announced a capital raise of $50 million.

R&Q is divided between legacy Insurance (R&Q Legacy) and program management (Accredited) businesses, which it announced in April will operate under two separate holding companies within the Group.

R&Q has received all necessary approvals to complete this internal reorganisation. The separation is part of the requirement for Accredited to receive its own separate subgroup financial strength rating from AM Best.

In addition, R&Q is continuing to explore strategic transactions with third parties as part of the separation to enable Accredited to operate independently. A process is underway for the potential sale of Accredited with interest expressed from a number of parties. In addition, a variety of strategic alternatives are being explored in relation to R&Q Legacy.

The proceeds from the capital raise will be used to increase the capitalisation of R&Q Legacy, which is providing reinsurance support for completed legacy transactions originated by Accredited. It will also be used for general corporate purposes due to Accredited no longer paying intra-group dividends to R&Q as part of a requirement to secure its financial strength rating from AM Best.

“This additional capital, alongside our completed internal reorganisation, means Accredited and R&Q Legacy can be established as stand-alone entities within R&Q,” said William Spiegel, chief executive. “R&Q Legacy has seen three transactions signed or completed this year and has a strong pipeline of transactions to grow Reserves Under Management beyond $1.0 billion. R&Q Legacy continues to focus its efforts on its key areas of strength, medium sized legacy transactions, while exploring potential further corporate liability opportunities. I am pleased with the progress we are making to enable both Accredited and R&Q Legacy to maximise their potential by having the right ownership and capital structures in place.”