Best’s News & Research Service - April 04, 2022 11:55 AM (EDT)
AM Best Places Credit Ratings of Randall & Quilter Investment Holdings Ltd. and Its Rated Subsidiaries Under Review
- April 04, 2022 11:55 AM (EDT)
London //BestWire// - AM Best has placed under review with developing implications the Financial Strength Rating 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, FL), Accredited Specialty Insurance Company (ASI) (Phoenix, AZ) and Accredited Insurance (Europe) Limited (AIEL) (Malta). Concurrently, AM Best has placed under review with developing implications the Long-Term ICR of “bbb-” (Good) of Randall & Quilter Investment Holdings Ltd. (R&Q) (Bermuda) [AIM: RQIH], the non-operating holding company of the group. ASC, ASI and AIEL are wholly owned subsidiaries of R&Q.
The Credit Rating (rating) actions follow the announcement on 1 April 2022, that Brickell PC Insurance Holdings LLC (Brickell) will acquire, in cash, the remainder of shares in R&Q that it does not currently own, subject to shareholder and regulatory approval.
The developing implications reflect uncertainties surrounding R&Q’s prospective risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), and its final ownership structure. The ratings will remain under review with developing implications until AM Best has sufficient clarity over the group’s rating fundamentals following its acquisition.
R&Q additionally plans to issue USD 100 million of convertible preference shares to Brickell, subject to shareholder approval. The funding materially restores R&Q’s capital base following an expected IFRS loss for 2021 of USD 135 to 145 million. Of this, approximately USD 90 million relates to a non-cash charge due to the impairment of an asset relating to a structured reinsurance contract, which is likely to be commuted.
Despite its poor IFRS result for 2021, R&Q’s underlying book of business is performing well, and the group has good growth opportunities in its two core business lines. Its business strategy is not expected to change as a result of the change in ownership.
This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.