Randall & Quilter seeking ‘Names’ for new syndicate

Run-off specialist Randall & Quilter (R&Q) is planning to take Lloyd’s back to its roots by tapping private investors for the bulk of the capacity for its new Lloyd’s syndicate.

R&Q announced on 1 August that it had received approval in principle from Lloyd’s to set up a syndicate. It plans to start underwriting at the beginning of next year.

According to R&Q chief executive Ken Randall, the firm will put up about 20% of the capital for the new operation, Syndicate 1991, and hopes to source the “majority” of the remainder from private individual investors, known as Names. R&Q has also been offered a small amount of corporate capital for the syndicate, Randall said.

Syndicate 1991’s capital make-up will be a departure for modern Lloyd’s. While Names were historically the sole source of capital in the market, they only made up 12% of the capital base of Lloyd’s as at the end of 2011.

Lloyd’s has thrown the baby out with the bathwater”

Ken Randall, R&Q

Speaking to Insurance Times after the release of R&Q’s first-half results last week, Randall said the ability for Names to effectively use its capital twice - by lodging funds at Lloyd’s, and making money from underwriting but still owning and receiving returns from those assets - should prove to be an attractive lure for private investors.

He said: “In a way, Lloyd’s has thrown the baby out with the bathwater in this area [by relying mainly on corporate capital] and we’re seeking to capitalise on that.”

R&Q still has to have its business plan approved by Lloyd’s and finalise contracts with the capital providers before the syndicate’s launch next year.