Shares digital

Newly-listed insurance player Randall & Quilter (RQIH:AIM) has received approval from Bermudan authorities for the setting up of a group-owned Bermudan reinsurer.

Randall & Quilter’s business consists of managing or owning run-off insurance companies, in exchange for a fee or profits and dividends respectively. Larger insurers often wish to get rid of businesses that are no longer part of core activities and Randall & Quilter’s has expertise and a track record in managing these run-offs.

The newly approved Bermudan subsidiary will only reinsure the company’s subsidiaries in part or in whole, allowing the company to negotiate reinsurance policies from third parties more efficiently.

The group raised £20 million last month and has a market cap of £76 million. The listing secured capital for organic growth and acquisitions and allowed it to restructure some banking facilities.

Independent research house Equity Development sticks a 173p target price to the shares, leaving some 26% upside.

Shares says: Works in an interesting niche area that should be insurance cycle-proof.