Randall & Quilter

Non-life insurance investor and services group Randall & Quilter is scouting US takeovers after hoisting interim pre-tax profits fivefold to £3.7m.

Steered by formidable London market veteran Ken Randall, the company has been expanding from its original run-off speciality into other niche areas, such as premium credit control and binding authorities (where underwriters cede underwriting authority to brokers within set parameters), with a focus on areas pinpointed by the Lloyd's insurance market as ripe for improvement.

AIM-quoted Randall & Quilter, whose profits collapsed in 2009 from £8.8m to £260,000 after a settlement with long-tail market reinsurer Equitas, lifted turnover 53% to £16.1m in the six months to June and has come up with a scheme to return some £1.6m to shareholders. Much of the first-half profits bonanza comes from a US legal settlement between insurers exposed to to the 2001 World Trade Center attack in New York, including Randall & Quilter-run Lloyd's Syndicate 3330, and is not going to be repeated, but Randall maintains the insurance service businesses the company has acquired and plans to acquire will provide greater future profits visibility. 

Overall, he explains, insurers are waiting for a 'market turning event'. This would be a massive loss borne by a few but scaring away surplus capital and enabling everyone to impose hefty premium rate increases.

Randalll & Quilter has a progressive dividend policy and Randall says a 5% increase is on the cards, giving the shares, at 91p, a prospective yield of 8.1%. The price has all but halved in a year and some recovery is on the cards.