Closure will incur £600k of one-off costs
Run-off buyer Randall & Quilter has decided to close its Canadian managing general agency following a review.
R&Q chief executive Ken Randall will inform R&Q shareholders of the closure at the annual general meeting at noon today. The closure is expected to incur one-off costs of £600,000.
The company revealed in its 2011 annual report that it was considering its options for the Canadian MGA after it reported an operating loss of £10m in the full 2011 year.
According to the annual report, the Canada operation had “ struggled to gain the distribution channels and market penetration required, exacerbating the problems posed by low premium rates.”
Despite the Canada closure and the associated costs, Randall will tell shareholders that R&Q’s underwriting management division, of which the Canadian operation was a part, is “performing satisfactorily”.
“We are expecting improved trading in the division during the remainder of the year,” Randall will say. “We also continue to pursue additional syndicate management opportunities and to bring further operational efficiencies to our MGA business.”
Randallwill also say that the R&Q business overall “continues to perform well and indications are that the first half result will be in line with the board’s expectations.”
In particular, he will say the insurance investments division - R&Q’s core run-off buying business - looks set to have a strong first half. This is “driven by a good performance by the group’s run-off syndicates and higher than anticipated investment income earned by our insurance company subsidiaries.”