Accredited Europe inks multi-year £2bn GWP partnership with UK MGA Policy Expert

Randall & Quilter (R&Q)’s European program management arm Accredited Europe has unveiled a six-year agreement with expansive home and motor insurance MGA Policy Expert as it targets £2bn in gross written premium (GWP) over the period.

The deal with QMetric-owned Policy Expert marks the latest fronting arrangement for R&Q Accredited, which last month revealed it is on course to write $1.75bn in gross premium across its multiple MGA relationships in 2022.

The firm had previously earmarked $1.75bn as a GWP target by 2023.

London-listed R&Q first began providing fronting capacity to MGAs as a conduit between the vehicles and their (re)insurance capital providers in 2018, using its licensed and AM Best A- rated paper in Europe and the US. 

In five years of trading, it is thought to have grown to become one of the largest independent program managers behind State National when measured by GWP across its US and European platforms.

In that time, the global MGA market has also mushroomed and is now thought to be at least $100bn in size, with more than $60bn written in the US. 

In December 2021, the firm said that between 30 September and 30 November 2021, it added five new programs to its roster, bringing the total number of programs to 75. These included tie-ups with Rokstone, Corvus and Orchid Underwriters Agency.

The acceleration of R&Q Accredited is also part of the group strategy of becoming a less capital-heavy business, using its $300mn sidecar Gibson Re as a capital partner and thereby enabling a greater focus on regular, fee-earning business.

The agreement with Policy Expert comes after R&Q late last week extended the deadline for shareholders to vote on its £482mn go-private deal with Brickell after it narrowly missed out on the 75 percent threshold required.

The special general meeting has now been adjourned until tomorrow (25 May) to ensure shareholders have been given “the time to consider the resolutions in the context of the current votes cast”.

Shareholders wishing to change their vote had to do so by yesterday afternoon.

Brickell – the insurance arm of Miami investor 777 Partners – first acquired a stake in R&Q three years ago and its shareholding has since grown to 23.2 percent. 

Under the terms of the proposed deal Brickell will pay 175 pence per share to acquire R&Q. The offer represents a 20 percent premium to R&Q’s 146 pence closing price just before the deal was announced and values the business at circa 1.8x net tangible asset value.

Announcing the new partnership today at the European MGA Forum 2022 in Zurich, Accredited Europe CEO Colin Johnson said: “Policy Expert is a perfect fit for Accredited as we continue to diversify our business and partner with an exciting mix of niche and ‘Super’ MGAs.

”We were attracted by Policy Expert’s proven track record, market-leading data management and reporting capabilities, and the expertise and vision of its leadership team. We are looking forward to a long and successful relationship to support Policy Expert’s continued growth,” he added.

In a statement, Steve Hardy, executive chairman of Policy Expert, said: “Policy Expert has enjoyed over a decade of uninterrupted growth, fuelled by proprietary technology which has driven us from start-up to become a heavyweight insurtech that is firmly established as one of the UK’s major insurance providers.

“I am delighted to have agreed a long-term capacity arrangement with R&Q Accredited, which gives us a platform to significantly expand on our current position with over one million home and motor policyholders. Competitive cover and attentive customer service have never been more important to consumers, and I am looking forward to building on our track record of profitable growth,” Hardy continued.

Alan Quilter, R&Q group CEO, added: “This is a significant agreement with Policy Expert, and is the second long-term partnership that we have announced this year. Such long-term arrangements support our objective of delivering sustainable and predictable growth in our program management business and we will seek further opportunities from the strong relationships we are developing with MGA distributors and highly rated capacity providers including reinsurers and ILS vehicles.’’