REG - R&Q Insurance Hldgs - Notice of special general meeting

R&Q Insurance HoldingsAnnouncement

24/08/2022 07:00

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RNS Number : 9800W  R&Q Insurance Holdings Ltd  24 August 2022

 

FOR IMMEDIATE RELEASE

 

 24 August 2022

 

R&Q Insurance Holdings Ltd ("R&Q" or the "Company")

Notice of special general meeting and Board recommendation for shareholders to
vote against the resolutions requisitioned by Phoenix Asset Management
Partners Limited ("Phoenix")

Effective 12 August 2022, R&Q received a requisition notice from Phoenix
(indirectly holding 12.2% of the Company's issued share capital) to
requisition a Special General Meeting ("SGM") to table resolutions (the
"Resolutions") for the purposes of removing William Spiegel, our Executive
Chair, as a Director of the Company and to appoint Mr. Ken Randall as a
Director of the Company and, if William Spiegel is removed, to act as an
executive director to fill the vacancy created by William's removal. We
understand that these Resolutions are also supported by Brickell PC Insurance
Holdings LLC ("Brickell") (and, we assume, Brickell's related parties,
including 777 Partners LLC, 777 Asset Management LLC and certain other
affiliates (collectively, "777")) pursuant to Brickell's open letter to
shareholders dated 16 August 2022.

The Board has sought to engage constructively with Phoenix over a number of
weeks, including right up to the time by which the Company was required to
announce publicly service of the requisition notice to the market on 12 August
2022, to understand the motivations for their proposals and appropriately
address any potential concerns. However, during these discussions, Phoenix
has, in the Board's view, failed to engage collaboratively or articulate any
sound justification for such proposals being in the best interests of the
Company.

Accordingly, the Company is now making available to shareholders a circular
containing a notice of special general meeting to be held at 2 p.m. on 13
September 2022 at the Leonardo Royal Hotel London Tower Bridge, Sidney Suite,
45 Prescot Street, London E1 8GP for the purposes of voting on the
Resolutions. It is important that shareholders vote at that meeting.  A full
copy of the circular is also available on the Company's website at
www.rqih.com/investors/.

As explained in the circular, the Board is unanimous in its support for
William Spiegel and the strategy he and his management team have set out for
the Company and strongly and unanimously believes that the Resolutions put
forward by Phoenix are not in the best interests of the Company, its
shareholders as a whole or its wider stakeholders.

The Board, therefore, recommends that shareholders vote against these
Resolutions at the SGM.  All shareholders are strongly encouraged to cast
their votes against the Resolutions either in person, or by submitting forms
of proxy by 2 p.m. on 9 September 2022 or (for holders of depository interests
only) forms of instruction or CREST instructions (as relevant) by 2 p.m. on 8
September 2022.

A reminder of R&Q's new strategy and recent progress

In 2021, the Company announced William and his management team's new five-year
strategy to transform R&Q into a capital lighter business based primarily
on recurring fees. Through the successful deployment of this strategy, R&Q
is becoming a specialty insurance company which comprises three primarily
fee-based business units:

·      Program Management: which provides insurance licences and rated
paper that connects Managing General Agents ("MGA") to reinsurers in exchange
for recurring annual fees while retaining a small amount (approximately 7%) of
underwriting risk;

 

·      Legacy Insurance: which is transitioning into an acquirer and
third-party manager of run-off insurance liabilities in exchange for recurring
annual fees while retaining only 20% of underwriting risk; and

 

·      Minority MGA Investments: in addition, R&Q aims to generate
profits from its investments in MGAs that utilise the Company's Program
Management services.  The first of these investments provides R&Q with a
minority share of the fee-based earnings of the underlying MGA.

In a very short time, the management team led by William Spiegel has
transformed the business from a balance sheet-led, capital-intensive business
model to a more simplified fee-based business. Today, R&Q is a simpler
business for investors to understand and is significantly better positioned to
deliver more predictable and less volatile earnings, reduce retention of
underwriting risk and generate higher shareholder dividends over the longer
term. The full details of this strategy, including the Board's view on
associated risks, are set out in the Company's annual report for the year
ended 31 December 2021. To summarise this transition:

·      R&Q's former business model:

 

o  A complex revenue model, driven by upfront underwriting income associated
with Legacy Insurance;

o  Episodic earnings due to unpredictable  timing of legacy insurance
transactions; and

o  A balance sheet intensive business due to the capital intensity of Legacy
Insurance transactions (each transaction requires a capital outlay of around
30 - 40% of net reserves acquired) and the continual need to raise equity to
fund growth;

 whereas

 

·      R&Q's new business model:

 

o  A cleaner, simpler revenue model, driven primarily by annual recurring fee
income based on Program Management Gross Written Premium ("GWP") and Legacy
Insurance Reserves Under Management ("RUM");

o  Predictable, high quality and scalable annual recurring fee income; and

o  A balance sheet lighter business with the majority of capital required to
fund growth now provided by third parties, which improves returns on allocated
capital.

 

With the full and unanimous support of the Board, William and his management
team are committed to continuing to transform the business by deploying this
strategy through a clear five-pillar approach, which has already delivered
significant results and promises to deliver much more:

Pillar 1: Enhancing transparency in order to drive decision-making that
facilitates long-term value creation, efficient allocation of capital and
enhanced risk-management and governance

·      Re-defined KPIs to focus on cash economics (e.g. Pre-Tax
Operating Profit) rather than accounting profits, which include non-cash items
such as intangibles created on Legacy Insurance acquisitions, mark-to-market
unrealised gains and losses on the fixed income investment portfolio
associated with interest rate changes and other non-recurring items

·      Developed and articulated a robust capital and liquidity
framework

·      Introduced a robust reserving committee

·      Developed a sustainable dividend policy based on cash economics
(e.g. Pre-Tax Operating Profit)

·      Enhancing the risk framework, supported by more sophisticated
stochastic modeling of risks and their impact on liquidity and earnings

·      Optimising the investment portfolio with a focus on
Asset-Liability Management

·      Created an emerging issues tracking and monitoring process to
identify and better manage risk

·      Created an "after action review process" to self-assess and take
lessons learned across the organisation

Pillar 2: Increasing annual recurring fee income and pivoting to a
capital-lighter model

·      Transitioning Legacy Insurance to an annual recurring fee
business based on Reserves Under Management ("RUM") through the successful
launch of Gibson Re in 2021, raising c.$300 million of third-party capital

·      Growing RUM in Legacy Insurance to $417 million in less than one
year with annual fees of 4.25% on RUM

·      Reduced 2021 capital requirements for Legacy Insurance by c.$100
million due to the formation of Gibson Re

·      Grew Program Management GWP by 82% in H1 2022 versus H1 2021 to
$807 million

·      Grew Program Management Fee Income (excluding the minority
investment in Tradesman) by over 105% in H1 2022 versus H1 2021 to $39 million

·      Accelerated expected Program Management GWP in 2022 to $1.75
billion of Gross Written Premium, one year ahead of original guidance

Pillar 3: Automating Processes in response to significant historical
underinvestment under previous management

·      Investing over $20 million to upgrade the infrastructure in order
to support compliance requirements and business growth objectives, with an
expected three-year payback

·      Moving to a single group-wide general ledger from  multiple
regional and disparate financial systems

·      Implementing automation tools including robotics to eliminate
extensive manual business processes and reduce over-reliance on end user
computing tools such as spreadsheets

·      Digitised, ingested and categorised over one million paper
documents into a modern document management solution

·      Designed and implemented a robust cloud-based infrastructure
enabling financial and actuarial data ingestion, validation, pre-processing
and automated management information

·      Migrating data from legacy claim systems to our enterprise claim
warehouse to reduce reliance on legacy technologies and rationalize our
application footprint

Pillar 4: Engaging Employees to empower constructive dialogue on executing the
R&Q strategy

·      Expanding our talent mix across the organisation

·      Introduced a metrics-based compensation plan and goal setting

·      Improved communication and collaboration across lines of business
and geographies

·    Leading by example and encouraging a culture of innovation and
speaking up

·    Defining the future of work for employees

·      Instituted regular town halls and communication across the
organisation to promote transparency and active engagement from all levels

Pillar 5: Acting Responsibly for all stakeholders and the environment

·      Focusing on behavioral change tied to long-term value creation
rather than short-term profits

·      Completed an organisational assessment of ESG and gaining greater
visibility on our carbon footprint

·      Launched a bottom-up development of our purpose and values

·      Enhanced our community engagement

As the above demonstrates, William and his management team have changed the
model from being disproportionately focused on short-term accounting profit to
a model focused on long-term value creation for all its stakeholders. While
the transition to a simplified fee-based business came with some previously
guided-to reductions in non-recurring Day 1 accounting gains as they are
replaced with recurring annual fee income on RUM, R&Q has demonstrated
significant progress against this strategy already, and is on track to deliver
its target of in excess of $90 million of Pre-Tax Operating Profit in 2024.
The Board also notes that this progress, and William's influence on
performance, has been particularly impressive in the context of him having
been in the role for just under eighteen months.

Furthermore, at R&Q's recent trading update on the Program Management
business on 8 August 2022, R&Q announced an 82% increase in GWP to $807m
and a 105% increase in Fee Income (excluding the minority investment in
Tradesman) to $39m for the 6-month period ending 30 June 2022.  This increase
reflects the strong momentum in the business, including a number of new
programs with partners such as First Underwriting and Policy Expert.

At the Company's Annual General Meeting ("AGM") on 14 July 2022 (and after the
capital raise described further below), the independent shareholder base
(excluding Phoenix, Brickell, 777 and Mr. Randall) voted 97.64% in favour of
the reappointment of William Spiegel as Executive Chair. This represented a
further endorsement by shareholders of R&Q's management team, led by
William Spiegel, and the Company's strategic direction.

Steps R&Q's new leadership has taken to address historical financial
issues

Since William Spiegel's appointment as Executive Chair in April 2021, the
management team has, as described below, taken significant and decisive steps
to address certain historical matters and strengthen R&Q's balance sheet
for the long term. These were the right steps, taken in the best long-term
interests of the Company, but they contributed significantly to the c.$127
million IFRS after-tax loss incurred by R&Q in 2021.

Review of Legacy Insurance portfolio

In April 2022, R&Q announced an extraordinary non-cash, pre-tax charge of
c. $90 million which related to the year ended 31 December 2021. By way of
background, R&Q acquired a company over 15 years ago which in 2015
acquired a reinsurance policy that provided coverage once claim payments
reached a certain level. The reinsurance policy contained an experience refund
to the acquired company of any residual assets under the reinsurance treaty
above and beyond that needed to pay claims. The experience refund was treated
as an asset on the Group's balance sheet under current IFRS standards based on
the amount expected to be realised in the ordinary course over a 40-year
projection period (the Board notes that this will not be a permitted asset
under IFRS 17). During the latter part of 2021, claims payments accelerated
above expectations, leaving the subsidiary with minimal liquid assets and
still requiring $34 million in future claim payments before it could access
the reinsurance coverage. Management believed it was in the best interests of
shareholders for the subsidiary to commute the reinsurance policy in order to
provide liquidity to meet anticipated claims rather than having R&Q
contribute up to $34 million to this subsidiary over the next two to three
years. The impairment of the asset arose from the early commutation of this
reinsurance contract. It is important to note that this impairment was not
related to the Company's core Legacy Insurance and Program Management
businesses nor any of the Accredited companies. The decision R&Q took
helped position the Company to move forward with a cleaner, less volatile
business.

Strengthening of reserves and funding of collateral requirements

The current management team also strengthened R&Q's reserves across a
number of prior Legacy Insurance transactions resulting in a further reserve
strengthening of c. $29 million in 2021. This strengthening required use of
meaningful cash capacity to fund collateral requirements primarily in Lloyd's.

Capital raise

In the face of a combination of both the c $90 million non-cash charge and the
limited cash resources associated with funding collateral requirements,
R&Q was required to raise capital to reduce financial leverage and provide
financial flexibility.

In July 2022, R&Q successfully completed the capital raise and the strong
level of shareholder appetite and support for R&Q was demonstrated by the
significant upsizing of the amount raised to $129.5m. This not only
strengthened the Company's balance sheet and renewed its strategic momentum,
but also represented a firm endorsement by R&Q's shareholders of the
Company's leadership team and strategy, and demonstrated their confidence in
the team to deliver this strategy.

Steps R&Q's new leadership has taken to improve governance

R&Q continues to improve its corporate governance

The Board commissioned an external Board evaluation in the second half of
2021, and, as a result, the Board planned certain actions in line with
corporate governance best practice for the benefit of all shareholders,
including the appointment of a new Non-Executive Chair and an additional
Independent Non-Executive Director.

Although effecting these plans was delayed initially by the Brickell offer and
more recently by the discussions the Board has had with Phoenix in relation to
the proposed Resolutions, as announced on 22 August 2022 R&Q is now able
to take steps to implement the first of those changes by appointing Robert
Legget to the Board as Senior Independent Non-Executive Director with effect
from 26 August 2022. The Board is also conducting a search for a new
Non-Executive Chair and additional Independent Non-Executive Directors.

As a further demonstration of its commitment to strengthening R&Q's
governance and enshrining due protections for its shareholders, R&Q's
Board also intends to put forward proposals in the fourth quarter of 2022 to
incorporate additional key protections from the UK Takeover Code into its
bye-laws.

Mr. Randall's return would be a backwards step in this context

The Board is aware of significant historical and ongoing relationships between
Mr. Randall and certain major R&Q shareholders, specifically Phoenix,
Brickell, and 777.  These relationships have included: (i) Mr. Randall's
visible role on the failed acquisition of R&Q by Brickell, where he led a
number of key due diligence calls on their behalf; and (ii) discussions that
the Company has been informed took place in 2021 between Mr. Randall, Phoenix
and Brickell/777 for the purposes of funding a US Special Purpose Acquisition
Company (SPAC).

The Board has considered carefully and worked diligently to improve R&Q's
corporate governance for the benefit of all shareholders.  In that context,
the Board has serious concerns that the replacement of William Spiegel by Mr.
Randall (as proposed by Phoenix and supported by Brickell/777) would be a
backwards step as potential conflicts of interest, including with respect to
Phoenix, Brickell and 777, could materially prejudice Mr. Randall's ability to
act impartially in the best interests of all shareholders.

Why is R&Q calling this meeting?

The Company has called this SGM in response to the requisition notice served
by Phoenix effective 12 August 2022. Under Bermudian law, the Company is
required to so convene a meeting on receiving requests to do so from
shareholders holding at least 10% of the Company's voting rights. Though not a
registered shareholder, Phoenix is the ultimate beneficial owner of 12.2% of
the Company's voting rights. To validly requisition a meeting, Phoenix should
have exercised its rights to become itself the registered holder of those
shares, but failed to do so. However, in the best interests of its
shareholders, in line with good governance, and given Phoenix's underlying
beneficial rights, the Board considers it appropriate for the Company's
broader shareholders to be given the opportunity to have their views heard on
Phoenix's Resolutions.

In its discussions with the Board on the topic, and public announcements to
date, Phoenix has, in the Board's view, also failed to engage collaboratively
or articulate any sound justification for the Resolutions being in the best
interests of the Company.  In particular, the Board considers that Phoenix
has: (i) not provided a reasoned basis for its belief that these changes would
be of benefit to the Company nor the basis for its disapproval of R&Q's
current strategy or William Spiegel's leadership; and (ii) not properly
recognised the detrimental effect that the Resolutions would, if approved,
have on R&Q, its strategy, its employees, stakeholders and shareholders.
Notwithstanding this, the Board has sought to engage constructively with
Phoenix, including right up to the time by which R&Q was required to
publicly announce service of the requisition notice to the market on 12 August
2022, to understand the motivations for their proposals and appropriately
address any potential concerns.

The views and recommendation of the R&Q Board on Phoenix's Resolutions

As stated above, the Board (including all of the Independent Non-Executive
Directors, each of whom was first appointed while Mr. Randall was Executive
Chair) is unanimous in its support for William.  It is confident that the
current strategy to reposition the business away from capital intensive
activities and towards less volatile, fast-growing and scalable fee generating
activities is the correct one for R&Q.  This strategy will help R&Q
to create sustainable dividends to, and significant value for, shareholders.

The Board is respectful of Mr. Randall as a founder of the business; however,
the Board considers that these proposals by Phoenix would run counter to the
wishes of shareholders as a whole (as shown at the recent AGM vote), the
independent governance procedures for the appointment of all Board Directors,
the broader independence of the Board and the improvements in reporting,
transparency, governance, finance, capital, operations and risk management
that have been undertaken since William's appointment in April 2021.

Therefore, having carefully considered these proposals in consultation with
its advisors, the Board has unanimously concluded that they would not be in
the best interests of the Company's shareholders as a whole, and recommends
shareholders to vote against the Resolutions at the SGM for the following
reasons:

·      The current strategy is the right one being implemented by the
right team as evidenced by the recently announced successful commercial
transactions described above, the recent results announcements and the
endorsement offered by shareholders through the votes at the AGM and the
Company's recent oversubscribed fundraise.

·      No sound justification has, in the Board's view, been provided by
Phoenix despite repeated requests by the Board and regular engagement, which
undermines the credibility of the Resolutions and calls into question how the
changes will add shareholder value.

·      Phoenix's proposals would undermine the improvements the current
leadership team have made to R&Q's reporting, transparency, finance,
capital, operations, culture and risk management to position the business for
future growth, including:

o  Significant improvements in accounting and business practices as well as
risk and governance controls. As described above, these actions have included:
(i) the review of the Legacy Insurance portfolio and identification of the
need to commute a reinsurance policy to address liquidity requirements at a
subsidiary; (ii) strengthening of R&Q's reserves across a number of Legacy
Insurance portfolios established and overseen by the previous management team;
and (iii) necessary efficiency and automation initiatives to remedy historical
underinvestment;

o  Improvements in culture, with employees feeling confident to challenge the
established business, risk and accounting practices. Under the leadership of
the Global Head of Human Resources hired by William in 2020, significant
cultural improvement work has been undertaken and formal employee engagement
and assessment practices have been established for the first time;

o  Improved approach to ESG. The implementation of a new ESG strategy is
underway, including through an increased focus on community engagement, a
bottom-up development of R&Q's purpose and values, visibility over
R&Q's carbon footprint and behavioural change tied to long-term value
creation rather than short-term profits;

o  Improvements in the Group's infrastructure and technology, and the
implementation of a clear data strategy. The Group's infrastructure suffered
from lack of investment and independent third party consultants advised the
Company that the only way to support business growth, realise efficiencies and
comply with new regulatory requirements was to make a significant change in
the infrastructure and underlying processes. The new team is investing over
$20 million to improve the Group's operations across both business lines and
finance.  This includes implementing a new single group accounting ledger as
well as making extensive changes to the IT infrastructure by moving data to
the cloud, adding robotics and improving reporting tools. We expect this
upfront investment to be recovered in approximately three years and it will
help generate significant annual cost savings by 2024, once implemented; and

 

o  A more sustainable approach to capital and liquidity. As described above,
R&Q's clear strategy is to move towards: (i) a simplified revenue model,
driven primarily by predictable, high quality annual recurring fee income on
program management gross written premium and legacy insurance reserves;  and
(ii) being balance sheet lighter with capital required to fund legacy growth
provided largely by third parties.  In addition, R&Q has taken steps to
develop a more sustainable dividend policy based on cash profits rather than
accounting profits.

 

·      Phoenix's proposals would have a negative impact on governance,
due to the following factors:

 

o  Phoenix's Resolutions run counter to the clear endorsement provided by
shareholders at the recent AGM. At the recent AGM, the Company's shareholders
(excluding Phoenix, Brickell, 777 and Mr. Randall) voted 97.64% in favour of
the reappointment of William Spiegel as Executive Chair, a clear endorsement
of R&Q's current leadership and strategy;

 

o  Risks of conflicts of interest if Mr. Randall returns to R&Q. Current
management is determined to align the Company with UK listed company best
practice and has taken significant steps to improve R&Q's governance for
the benefit of all shareholders. Given the significant historical and ongoing
relationships between Mr. Randall and Phoenix, Brickell and 777, the Board has
serious concerns in this context that the replacement of William Spiegel by
Mr. Randall would be a backwards step - in particular, because potential
conflicts of interest could materially prejudice Mr. Randall's ability to act
impartially in the best interests of all shareholders;

 

o  The heightened risk of significant succession uncertainty. The Board
reminds shareholders that succession uncertainty had, prior to William
Spiegel's appointment (whom Mr Randall publicly re-confirmed his support for
as his successor at the time of his retirement), been a significant and
longstanding challenge for R&Q given Mr. Randall's two previous failed
succession plans. This would risk once again becoming a significant potential
challenge were Mr. Randall to return, in particular given the importance of
long-term stability to R&Q's two core businesses; and

 

o  This appointment would be inconsistent with the Board's rigorous process
for new director appointments. R&Q has detailed and rigorous procedures
for the appointment of new directors. The appointment of Mr. Randall in such
circumstances would run counter to the strong independent governance
procedures which have been put in place for the benefit of all shareholders
for the appointment of new directors.

 

·      William Spiegel's replacement by Mr. Randall could raise
significant retention and recruitment concerns regarding senior management and
employees. William Spiegel's direct reports have fully endorsed his strategy.
If Mr. Randall replaces William Spiegel, or comes back into the business as
proposed by Phoenix, then there is a very serious risk of many, if not most,
of William's direct reports (including the CFO) and a number of other senior
executives choosing to consider their own positions given their belief in
R&Q's existing culture and strategy.

Were this to happen, this would clearly have negative implications for the
Company's client and broader commercial relationships, as well as ongoing
essential transformation projects to strengthen the business. In the Board's
view, such a leadership change would also make it more difficult to recruit
for important essential roles within the Company.

·      Implications for R&Q's credit rating and sources of finance:
AM Best recently removed R&Q from negative watch due to both the capital
raise and William's strategy of moving to a capital-lighter model. In
addition, the current management team has a constructive relationship with the
Company's lenders. The Board is mindful of the potential impact in that regard
of any unwelcome and unjustified change to the Company's strategy or
leadership team.

 

·      Importance of stability. After recent events the Board believes
that R&Q needs a period of stability and focus so that it can deliver on
the strategic priorities and objectives communicated to shareholders. Any
unwelcome and unjustified change in senior management and the Board which
could be brought about by these Resolutions will only serve to risk
instability which will negatively impact the Company's ability to deliver
value for its shareholders.

Alongside the serious concerns raised by the Board regarding Phoenix's
proposals, the Independent Non-Executive Directors would each individually
have to consider carefully their positions, and whether they would be willing
to continue to serve on the Board if Mr. Randall were to re-join the Company
as proposed by Phoenix.

The Board is confident that under William's leadership R&Q is moving
towards having a modern, robust governance framework in place for the benefit
of all shareholders, with due protection for minority shareholders, and that
recent events have shown strong support for the Board's strategy. The Board
therefore believes that R&Q will be best served by allowing the management
team time to execute on its strategy and to continue to create shareholder
value.

Board statement (excluding William Siegel):

"William and his management team have the Board's unanimous and unequivocal
support. William has steered the business through some difficult circumstances
in the last few months. He has put in place a very strong employee-led
culture, strengthened governance and risk management, and has the full support
of the Board, the senior management team and wider staff. R&Q has
demonstrated clear and tangible momentum in its two core businesses, with the
Company on track to deliver a step-change in earnings over the coming years.
Any change in management and/or strategy would only destabilise the business
and its people, destroy value and undermine the independence of the Board.
From the Board's perspective, the business is in excellent shape and the
Directors are extremely excited about R&Q prospects under William's
leadership. The Board also looks forward to updating you on the Company's
broader performance at the upcoming results announcement on 5(th) September."

 

   Enquiries to:

R&Q Insurance Holdings Ltd

 Tel: +44(0)20 7780 5850

 William Spiegel

 Tom Solomon

 Fenchurch Advisory Partners LLP  (Financial
 Adviser)                       Tel: +44 (0)20 7382 2222

 Kunal Gandhi

 Brendan Perkins

 Richard Locke

 Tihomir Kerkenezov

 Numis Securities Limited (Nominated Adviser and Joint Broker)
 Tel : +44 (0)20 7260 1000

 Charles
 Farquhar

 Giles
 Rolls

 Barclays Bank PLC (Joint
 Broker)
                                 Tel: +44 (0)20
 7632 2322

 Andrew
 Tusa

 Anusuya Nayar
 Gupta

 FTI
 Consulting
     Tel: +44 (0)20 3727 1051

 Tom
 Blackwell

  Enquiries to:

 R&Q Insurance Holdings Ltd

 Tel: +44(0)20 7780 5850

 William Spiegel

 Tom Solomon

 Fenchurch Advisory Partners LLP  (Financial
 Adviser)                       Tel: +44 (0)20 7382 2222

 Kunal Gandhi

 Brendan Perkins

 Richard Locke

 Tihomir Kerkenezov

 Numis Securities Limited (Nominated Adviser and Joint Broker)
 Tel : +44 (0)20 7260 1000

 Charles
 Farquhar

 Giles
 Rolls

 Barclays Bank PLC (Joint
 Broker)
                                 Tel: +44 (0)20
 7632 2322

 Andrew
 Tusa

 Anusuya Nayar
 Gupta

 FTI
 Consulting
     Tel: +44 (0)20 3727 1051

 Tom
 Blackwell

 

 

Slaughter and May is acting as legal adviser to R&Q.

 

Notes to Editors:

About R&Q

R&Q is a non-life global specialty insurance company operating two highly
complementary, businesses: Program Management and Legacy Insurance. Both of
these businesses are leaders in markets with high barriers to entry and
significant growth opportunities. Legacy Insurance generates profits and
capital extractions from expert management of legacy non-life insurance
portfolios. Program Management generates commission income from its licensed
(and rated) carriers in the US, EU and the UK, writing niche and profitable
program business, largely on behalf of highly rated reinsurers.

Legal Entity Identifier (LEI): 2138006K1U38QCGLFC94

Website: www.rqih.com

Important Notices

Fenchurch Advisory Partners LLP, which is authorised and regulated by the
Financial Conduct Authority (the "FCA") in the United Kingdom, is acting
exclusively for R&Q and for no one else in connection with the subject
matter of this announcement and will not be responsible to anyone other than
R&Q for providing the protections afforded to clients of Fenchurch
Advisory Partners LLP nor for providing advice in connection with the subject
matter of this announcement.

Numis Securities Limited ("Numis"), which is authorised and regulated in the
United Kingdom by the FCA, is acting exclusively for R&Q and no one else
in connection with the matters set out in this announcement and will not
regard any other person as its client in relation to the matters in this
announcement and will not be responsible to anyone other than R&Q for
providing the protections afforded to clients of Numis, nor for providing
advice in relation to any matter referred to herein.

Barclays Bank PLC ("Barclays") is authorised by the Prudential Regulation
Authority (the "PRA") and regulated in the United Kingdom by the PRA and the
FCA. Barclays is acting exclusively for the Company and no one else in
connection with the content of this announcement or any matters described in
this announcement. Barclays will not regard any other person as its client in
relation to the content of this announcement or any matters described in this
announcement and will not be responsible to anyone other than the Company for
providing the protections afforded to its clients or for providing advice to
any other person in relation to any matter referred to herein.

Certain statements contained in this announcement constitute "forward-looking
statements" with respect to the financial condition, results of operations and
businesses and plans of the Company and its subsidiaries (the "Group"). Words
such as "believes", "anticipates", "estimates", "expects", "intends", "plans",
"aims", "potential", "will", "would", "could", "considered", "likely",
"estimate" and variations of these words and similar future or conditional
expressions, are intended to identify forward-looking statements but are not
the exclusive means of identifying such statements. These statements and
forecasts involve risk and uncertainty because they relate to events and
depend upon future circumstances that have not occurred. There is a number of
factors that could cause actual results or developments to differ materially
from those expressed or implied by these forward-looking statements and
forecasts. As a result, the Group's actual financial condition, results of
operations and business and plans may differ materially from the plans, goals
and expectations expressed or implied by these forward-looking statements. No
representation or warranty is made as to the achievement or reasonableness of,
and no reliance should be placed on, such forward-looking statements. The
forward-looking statements contained in this announcement speak only as of the
date of this announcement. The Company, its directors, Barclays, Fenchurch
Advisory Partners LLP, Numis, their respective affiliates and any person
acting on its or their behalf each expressly disclaim any obligation or
undertaking to update or revise publicly any forward-looking statements,
whether as a result of new information, future events or otherwise, unless
required to do so by applicable law or regulation of the London Stock
Exchange.

Unless explicitly labelled as such, no statement in this announcement is
intended to be a profit forecast or profit estimate for any period, and no
statement in this announcement should be interpreted to mean that earnings,
earnings per share or income, cash flow from operations or free cash flow for
the Company for the current or future financial years would necessarily match
or exceed the historical published earnings, earnings per share or income,
cash flow from operations or free cash flow for the Company.

 

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