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Randall & Quilter Investment Holdings Ltd on Monday reported it swung to a loss in 2021 and said it plans to raise $108 million through a share placing and open offer.
The Bermuda-based insurer swung to a pretax loss $162.0 million in 2021 from a profit of $38.7 million the previous year.
It posted an IFRS loss after tax of $127.4 million. R&Q explained that this was primarily due to a $90 million pretax non-cash charge, which it did not specify, and the transformation of its Legacy Insurance business model from upfront 'day-one' underwriting income to annual recurring fee-income.
The Legacy Insurance business, one of its two businesses, completed 15 transactions in 2021, with gross reserves acquired of $735 million. Reserves under management stood at $417 million.
Its Program Management business reported gross written premiums totalling $1.0 billion in the year. This was nearly doubled from the previous year's figure of $539 million.
Fee income for the business stood at $56.1 million, more than double the $24.1 million achieved in 2020.
Looking forward, the company expects to achieve $1.8 billion of gross written premiums in 2022 and a pretax operating profit of $90 million by 2024.
Randall & Quilter said it is raising a minimum of $100 million via a placing, subscription and open offer. The shares will be offered at a price of 105 pence per share. Shares in R&Q were up 7.8% at 99.20 pence on Monday morning in London.
Members of its board and senior management team intend to subscribe for around $1.4 million in new shares, and the company also will make an open offer to existing shareholders for up $8 million.
‘We expect to complete our fundraise in the coming weeks, and I have been encouraged by the strong indications of interest we have had from shareholders. This funding will give us the capital we need to de-lever our balance sheet and maintain the strong financial profile that is an important part of our growth,’ said Chair William Spiegel.
The fund raise follows R&Q shareholders late last month voting to reject a £482 million takeover offer from 23% shareholder Brickell PC Insurance Holdings LLC.
Brickell also had committed to provide $100 million in new equity funding to R&Q to de-leverage its balance sheet, so the equity raise announced on Monday is intended to replace this.
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