R&Q’s planned US E&S program market entry will open up another potential avenue for significant growth for the firm, according to Numis Securities, with premium growth momentum already ahead of schedule in the group’s fronting operations.


Numis said R&Q’s shares looked “increasingly cheap” given the improving visibility of significant earnings growth from its MGA program business following an investor statement issued yesterday.

Investors reacted positively to the statement, with shares in the London-listed run-off and fronting specialist trading up 5 percent in the morning session, closing at £158.88 yesterday.

The analysts said growth momentum in the MGA program business suggests it is on course to achieve its $1.5bn to $2bn contracted annual premium target for 2022/23.

Program management revenue and profit growth

The investor statement revealed the group’s program business, Accredited, had now passed its milestone target of $1bn premium income.

Total premium income now stands at $1.1bn, a 34 percent increase since December 2019.

The firm has also bought forward its planned entry into the US E&S program market to the fourth quarter of 2020.

Numis said R&Q was “firmly on track” to achieve its premium targets, which will form the basis of “significant expected future value creation from high quality recurring commission revenue”.

Contracted annual premium income from MGA clients totalled $925mn as of June, an increase of 10 percent since December.


The premiums are spread across 36 MGA programs, an increase of 10 programs over the last 12 months. A further $200mn from four new programs has been contracted since June, lifting year to date growth to 34 percent and pro forma total contracted income to $1.125bn.

Numis said this premium pool will generate strong commission revenue growth for R&Q over time, as contracted premium income from MGAs is steadily transferred and written through R&Q’s platform.