R&Q Runoff Deal Set To Close on Reinsurance Corporation of America

Randall & Quilter Investment Holdings Limited (R&Q) is set to acquire GLOBAL US Holdings Incorporated, the parent company of Reinsurance Corporation of America, a New York-domiciled reinsurance company in runoff. The acquisition is expected to be completed by the end of the year.

Regulatory approval is likely to occur early in 2019.

According to Steve McElhiney, president and CEO of EWI Reinsurance, runoff and related transactions present an enormous opportunity in the property-casualty industry. The common tools used for runoff transactions include commutations, loss portfolio transfers, and assumption agreement (novation), which can be employed to release and redeploy risk-bearing capital in support of new business strategies while freeing up organizational resources in return for an agreed-upon premium.

Historically, these runoff tools have been used in North America, London, and Europe. More recently, acquisitive Asian companies are taking on some excellent liabilities but may want to discharge some of them. There are also many captive insurance companies around the world that are subject to using runoff solutions, and many great opportunities for growth in runoff transactions exist.