Randall & Quilter Investment Holdings has completed a loss portfolio transfer from Houston International Insurance Group (HIIG).
The deal provides reinsurance protection and limited adverse development cover for circa $95 million of net reserves of three companies in HIIG: Houston Specialty Insurance Company, Imperium Insurance Company and Great Midwest Insurance Company.
The reserves relate to the companies' 2017 and prior policy years for certain portfolios.
Peter Smith, HIIG’s president, said the transfer agreement, combined with its recent equity capital raise and recruitment, put the company on a solid path towards the top tier of specialty carriers.
Paul Corver, group head of M&A at R&Q, said it has been a particularly complex transaction, given the involvement of three distinct operating companies and the need for regulatory approval from the Texas Department of Insurance.
“This deal is indicative of a growing trend amongst established insurers and reinsurers to work with the major legacy players to address reserve volatility. Moreover, with the increasing pressure from the COVID-19 pandemic on carriers' capital and rating requirements, we are seeing a significant increase in demand for R&Q's structured approach to assuming legacy liabilities,” he said.
Corver said R&Q’s pipeline remains “very healthy” and it expects to finalise more deals in coming weeks.
Randall & Quilter Investment Holdings, R&Q, Houston International Insurance Group, HIIG, Peter Smith, Paul Corver, Loss portfolio transfer