Monday 24 May 2021 8:01 am

Randall and Quilter's program division posts a profit for the first time

Randall and Quilter has reported record pre-tax profit after a year of “accelerated growth” with its program management business posting a profit for the first time.

The insurance firm reported a record pre-tax operating profit of £16m, an increase of 102 per cent, in the year ended 31 December 2020. Fee income soared 89 per cent to £18.8m, representing 17 per cent of gross operating income. 

It came after a “breakthrough” year for Randall and Quilter’s program management division, which, after four years, was profitable for the first time. It reported pre-tax operating profit of $3.4m after signing 18 new programs to bring the total to 48. 

Despite this shares in the firm plummeted nearly eight per cent in early trading.

Randall and Quilter’s legacy insurance business had a record year, completing 19 deals and delivering a 46 per cent increase in pre-tax operating profit to £38.1m. 

In the first quarter of this year, the business has completed one further deal and has five more under exclusivity representing approximately £150m of net reserves. 

Randall and Quilter has not been immune to the impact of the pandemic. “Very early in 2020 it was clear to us that the pandemic would result in significant structural changes to our markets, and that this would create highly attractive and accretive opportunities for R&Q,” executive chairman William Spiegel said. As a result, the Bermuda-based firm raised £173m of new capital to use in both its legacy and program markets. 

“With significant growth opportunities in front of us, our business will continue to consume capital over the near term, particularly our Legacy Insurance business,” Spiegel said. “Over time, however, we expect our Program Management business to create enough free cash flow to make us capital self-sufficient.”

The company today announced a final cash dividend of 0.2 pence per share for a total cash distribution for the year of four pence per share.