Chief executive Ken Randall says results were ‘solid’ despite setbacks

Randall & Quilter (R&Q) made a profit after tax and minority interests of £7.4m in 2013, down 33% on the £11.1m it made in 2012.

The run-off buyer and Lloyd’s syndicate manager’s operating profit was down 18% to £10.2m (2012: £12.5m).

R&Q chief executive Ken Randall said profits were hit by “slow premium development” on the active syndicates the company manages, as well as “a weaker result than originally anticipated” in its underwriting management division, which produced an operating loss of £177,000 (2012: loss of £1.5m).

The 2013 result also looked smaller compared with 2012 because the company retrospectively boosted its 2012 profit by £1.5m. This was caused by an increase in goodwill at Alma Insurance, which R&Q bought in late 2012.

Despite the lower profit, Randall described R&Q’s 2013 result as “solid” and “in line with management expectations”.

He added: “We look forward to the future with confidence.

“Our strong legacy and servicing pipelines continue to offer prospects for profitable development, including in the short term. We have a strong presence in the market for legacy insurance assets, although the exact timing of such acquisitions is always difficult to predict.

“While it has taken longer than planned to build our live underwriting platform, we remain confident that the overall strategy provides a firm foundation for strong, sustainable growth.”

Divisional performance

R&Q’s insurance investments division, which buys run-off companies and also provides underwriting capital to Lloyd’s syndicates, made an operating profit of £8.7m in 2013. This was down 21% on 2012’s £11m.

The insurance services division, which provides functions such as claims management, premium credit control and accounting, made an operating profit of £9.8m, down 2% on 2012’s £10.1m.

Within this segment, operating profit for R&Q’s Lloyd’s managing agency (MGA) activities fell 44% to £1.3m (2012: £2.4m), while the MGA made a small profit of £167,000 in 2013, compared with a £1.9m loss in 2012.