A number of parties have expressed interest in purchasing Accredited, the programme management business of Bermudian-based R&Q Insurance Holdings Ltd.

R&Q said it has received all necessary approvals to complete its previously announced strategic initiative to separate Accredited and R&Q Legacy, the company’s legacy insurance business.

It said it continues to explore strategic transactions with third parties as part of the separation to enable Accredited to operate independently.

It said a process is under way for its potential sale — and also disclosed that a variety of strategic alternatives are being explored in relation to R&Q Legacy.

The news comes as R&Q announced a capital raise of $50 million of non-voting, perpetual preferred equity issued by Randall & Quilter PS Holdings Inc, an indirect wholly owned subsidiary of R&Q, from investment funds affiliated with one of its largest shareholders, Scopia Capital Management, with the opportunity to increase the amount of equity raised to $60 million.

Accredited and R&Q Legacy will now operate under two separate holding companies within the group.

This separation is part of the requirement for Accredited to receive its own separate subgroup financial strength rating from AM Best.

The proceeds from the R&Q PS investment will be used to increase the capitalisation of R&Q Legacy, which is providing reinsurance support for completed legacy transactions originated by Accredited.

Proceeds will also be used for general corporate purposes as Accredited no longer pays intragroup dividends to R&Q as part of a requirement to secure its financial strength rating from AM Best.

In the meantime, R&Q announced strong results for Accredited in Q1 2023.

Gross written premium was $0.5 billion (Q1 2022: $0.4 billion).

Programme fee income was $22 million (Q1 2022: $18 million).

The company said Accredited continues to partner with leading managing general agents in Europe, Britain and the United States, and has added five new programmes in 2023. Accredited maintains a strong pipeline and expects to add additional partnerships over the remainder of the year.

William Spiegel, the group chief executive of R&Q, said: “This additional capital, alongside our completed internal reorganisation, means Accredited and R&Q Legacy can be established as stand-alone entities within R&Q.

“2023 has seen Accredited continue its strong momentum and leadership position in the programme market, achieving a record first quarter in terms of GWP and fee income.

“For the 12 months ended 31 March, 2023, Accredited’s GWP is approximately $2.0 billion, an increase of approximately $200 million from year end 2022, where we reported GWP of $1.8 billion.”

He added: “We are currently working very closely with AM Best to secure a subgroup rating for Accredited and have completed the key reorganisational requirements.

“R&Q Legacy has seen three transactions signed or completed this year and has a strong pipeline of transactions to grow reserves under management beyond $1.0 billion.

“R&Q Legacy continues to focus its efforts on its key areas of strength, medium-sized legacy transactions, while exploring potential further corporate liability opportunities.

“I am pleased with the progress we are making to enable both Accredited and R&Q Legacy to maximise their potential by having the right ownership and capital structures in place.”