R&Q has reached an agreement with Prosight Specialty Insurance to manage Syndicate 1110 in run-off.
R&Q Managing Agency will handle the day to day claims handling of the syndicate and will acquire the 100% shareholding of the Prosight corporate members; Prosight Specialty, TSMC, Limited and Prosight Specialty, ECUCM Limited that provide capital support to S1110.
Prosight will continue to meet Funds at Lloyd’s obligations in respect of S1110 until a Reinsurance to Close by R&Q in early 2020.
Prosight has the option of requiring R&Q to provide up to 30% of the FAL with 4 months’ notice in exchange for annual payments to cover R&Q’s cost of capital.
Based upon current expectations, the amount of FAL R&Q could be required to provide is circa £9.4m, the majority of which would be sourced from external funding providers.
R&Q, as owner of the corporate members, will have the benefit of 75% of any future reserve savings, with ProSight retaining a 25% profit interest.
Subject to regulatory approvals, R&Q will also acquire Prosight Specialty Underwriters Limited and Prosight Specialty Managing Agency Limited.
PSMAL will be de-authorised ahead of the completion of the acquisition by R&Q. The consideration payable will be approximately £1.1m.
Ken Randall, chairman of R&Q said, “We are delighted to have reached agreement with Prosight in respect of S1110. Our appetite for using our expert claims administration skills in the run-off of legacy Lloyd’s portfolios continues and this transaction is evidence of that.
“The ongoing collaboration with RQMA and Coverys, its proposed new owners, provides R&Q with continued access to the infrastructure required to manage syndicates with legacy business and we look forward to completing further transactions as the pipeline in this segment continues to grow.”
ProSight CEO Joe Beneducci added: “We are pleased to have completed this transaction enabling us to recapture our well performing US book of business and also retain a profits interest on the UK portfolio. We look forward to working together with R&Q on the run-off of the UK book.”
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