4th Apr 2023 14:33
(Alliance News) - R&Q Insurance Holdings Ltd on Tuesday predicted an annual loss and unveiled plans to separate its programme management business Accredited.
R&Q said that, given Accredited's size, it believes it is best for the unit to go it alone.
"Accredited relies on an 'A' credit rating to conduct business and historically relied on the financial strength of the broader group to obtain its credit rating. However, given Accredited's current size and scale, R&Q believes it is in the best interests of R&Q's shareholders for Accredited to stand on its own. Therefore, the board of R&Q is reviewing strategic alternatives to separate Accredited and Legacy Insurance, which will include a legal reorganisation followed by strategic transactions with third parties to achieve this objective," R&Q said.
"R&Q expects the separation will set each of Accredited and Legacy Insurance on more favourable footing to deliver profitable growth, each with their own appropriate capital structures."
Plans are subject to regulatory and lender green lights, which R&Q expects to receive in the second quarter of 2023.
In addition, the company expects to report a pretax operating loss between USD30 million and USD40 million for 2022, widening from USD21.0 million in 2021.
R&Q shares were 9.7% lower at 64.00 pence each in London on Tuesday afternoon.
By Eric Cunha, Alliance News news editor
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