Major acceleration of strategic refocus

Momentum behind the group’s strategic refocus is gathering pace. This year R&Q has sold its minority (40%) stake in Tradesman and set up a new JV with OBRA Capital to acquire non-insurance legacy liabilities. That builds on the creation in 2021 of Gibson Re to transform its legacy operations onto a less capital intensive, fee-based model.

The latest proposal is the most material transformation from a group perspective. It would create two separate standalone entities from its core operations, program management and legacy. R&Q expects the separation to establish its program management (Accredited) and legacy insurance operations with appropriate individual capital structures on a more favourable basis for profitable growth.

This potentially transforms the business from both operational and valuation perspectives. Subject to detail including proposed capital structures, each business could be reappraised independently without the material discount which we believe has negatively affected sum-of-the-parts assessments of the combined entity.

Our long-term forecasts and fair value assessment are suspended pending full detail of the plan, and we expect any separation of divisions to better highlight inherent group worth.