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R&Q in advanced talks with ProSight’s Lloyd’s arm

Randall & Quilter (R&Q) is in exclusive discussions with ProSight around a deal to take on the obligations of its now-defunct Syndicate 1110, The Insurance Insider can reveal.

The New Jersey-headquartered program insurer placed its Lloyd's operation into run-off in early June.

Sources said that Arch's legacy joint venture with Kelso, Premia Re, had also shown an interest in taking on the book.

However, with talks between R&Q and ProSight now exclusive, it seems likely a deal will make it over the line.

It is understood that R&Q will use its own capital for the deal despite its tie-up with Axa in the bidding process for the much larger Novae legacy book.

With the US program book already routed out of the syndicate by ProSight, the remaining run-off reserves that R&Q is looking to acquire are believed to be in the region of £100mn ($128.7mn).

R&Q struck a deal in June to sell its Lloyd's managing agency to US medical malpractice writer Coverys.

However, as part of the deal, R&Q retained the tenancy rights for R&Q Syndicate 1991 and will continue to conduct reinsurance to close business in the same way.

When it struck the sale, R&Q said the deal was part of an attempt to refocus and streamline the business, with capital allocated to growth areas including legacy.

ProSight's decision to call time on Syndicate 1110 was the first time a Lloyd's business has been fully placed into run-off since 2011, when Mitsui & Co and Labuan Re pulled the plug on Argenta Syndicate 1965 following crippling losses from the Thai floods.

ProSight pulled the US business from the syndicate earlier this year because of rising capital requirements within Lloyd's and mounting expenses, which rendered it more economic to hold it domestically in the US.

The insurer then appointed GC Securities to hold an auction process for its Lloyd's arm, which had only around £70mn-£80mn of remaining business.

The operation was marketed by GC Securities as a shell business which would have given an acquirer a Lloyd's managing agency and around £200mn of stamp capacity.

Any acquirer of Syndicate 1110 would have needed strong support from Lloyd's through the coming business planning rounds as it looked to build a new book. Sources have suggested that none of the interested parties had enough support from Lloyd's to follow through with their bids.

R&Q - in partnership with Axa - is also one of the final round bidders for Novae's Lloyd's run-off book, alongside Enstar.

R&Q declined to comment. ProSight did not respond to request for comment.

 

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