28th Feb 2014 12:48
LONDON (Alliance News) - Randall & Quilter Investment Holdings Ltd Friday said it expects its 2013 pretax profit to be in line with its expectations, though it still has to complete customary actuarial review procedures.
R&Q has been investing in building a significant management presence in the "active" Lloyd's market and said the effects of that process will continue to be felt in the current financial year.
R&Q shares were Friday quoted down 5.1% at 158.00 pence.
"The board remains confident that its strategy will deliver strong profit growth over the medium term, helped by a continuing focus on the re-engineering of its niche service business and buoyant legacy acquisition activity," R&Q said in a statement.
In an update ahead of its annual results, R&Q said its insurance services business is expected to have performed broadly in line, with progress in the UK offsetting income deferral in the US. Its insurance investments division looks to have performed well, with better than anticipated investment income and gains from acquisition activity.
But R&Q said its participation in Syndicate 1991 continued the poor performance shown in its half-year results, as a result of limited earned premiums in its first year of operation. R&Q said the slow earned-premium development is likely to be reflected in its group results for 2014. It has doubled the syndicate's capacity for the 2014 underwriting year.
"The performance of the Insurance Investments Division outside of the syndicate participations will continue to be dependent on acquisition activity as investment income continues to look challenging and the contribution from reserve releases from the existing portfolio is likely to continue to trend lower, simply as a function of the reduced level of non US reserves where most savings have typically occurred," R&Q said in a statement.
Meanwhile, R&Q said it is continuing to develop a good pipeline of "attractive" run-off opportunities, with a number of specific projects are being worked on, including some more significant portfolio transfers.
"The lengthy regulatory process and transaction time needed to complete such deals will mean that a number of the currently identified opportunities are likely to complete in the second half of the year. Together with the customary weighting of reserve releases following second half year actuarial reviews and certain service company income patterns, especially on the contingent side of the business, the group's 2014 profit is therefore likely to emerge substantially in the latter part of the year," R&Q said.
R&Q said it expects to report its results for 2013 on April 30.
By Samuel Agini; [email protected]; @samuelagini
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