Coverys, the Boston-based medical professional liability insurance and service company, continued its expansion announcing on June 23, 2017, it had signed an agreement to acquire a Lloyd’s of London turnkey managing agency from Randall & Quilter Investment Holdings (“R&Q”) for $23,600,000.
The acquisition and change of control is subject to regulatory approval by Lloyd’s and the Prudential Regulation Authority, a part of the Bank of England regulating financial institutions. The parties expect to receive final approvals later this year.
In more good news for Coverys, on June 29, 2017, A.M. Best upgraded the financial strength rating of four of Coverys’ wholly owned subsidiaries, MHA Insurance Company, Washington Casualty Insurance Company, and Preferred Professional Insurance Company from A- to A.
Since 2010, new syndicates have entered the London market by the turnkey process
Lloyd’s of London operates as an insurance market with risks underwritten by syndicates. New syndicates formed to enter the Lloyd’s market since 2010, have followed the so-called “turnkey” process. Under the turnkey process, an existing Lloyd’s managing agency sets up and manages the new syndicate until the syndicate has acquired the skill to market and manage its risk portfolio.
The Lloyd’s agency Coverys is acquiring, R&Q Managing Agency Limited (“RQMA”), assists investors in establishing new syndicates through this turnkey route with the objective of the investors eventually forming their own agency for placing insurance. Presently, RQMA provides management and operational services for an operating syndicates, Syndicate 1991, and a specialized syndicate, Syndicate 3330, that provides “reinsurance-to-close and other reinsurance solutions for legacy business within Lloyd’s.”
As part of the acquisition, Coverys will acquire RQMA’s full staff and business operations, including its turnkey business for new syndicates, and the continued responsibility to support the syndicates under management.
Coverys sees opportunity in London market
“Coverys seized this opportunity to expand our non-insurance services in addition to leveraging the knowledge and experience of RQMA’s leadership team,” said Gregg Hanson, CEO and president of Coverys. “This continued exposure and growth of Coverys through RQMA’s experience and relationships offers the ability to expand our sophisticated solutions space.”
For his part, Ken Randall, R&Q’s Chairman and CEO. “We have enjoyed working with Coverys for several months to assist in the development of their business in the London market. There is a good cultural fit between the two organizations and we look forward to continuing the relationship in respect of our specialist legacy Syndicate 3330 and exploring opportunities to work together in the future.” Mr. Randall also said, “R&Q Managing Agency Ltd is a well-developed and scalable platform and we are confident it will prosper under the stewardship of Coverys.”
Best rating upgrade for three subsidiaries
In addition to A.M. Best upgrading MHA Insurance Company, Washington Casualty Insurance Company and Preferred Professional Insurance Company to A, A.M. Best affirmed the A rating for the other Coverys group companies, ProMutual, ProSelect Insurance Company, Coverys Specialty Insurance Company, and a sponsored risk retention group, Coverys RRG, Inc.
Mr. Hanson, Coverys CEO, said of the rating upgrades and affirmations, “We were happy to learn the ratings for MHA, Washington Casualty, and PPIC have been upgraded and the ratings for ProMutual, ProSelect, Coverys Specialty, and Coverys RRG were affirmed,” said. “Coverys has a strong balance sheet and an investment portfolio that generates consistent investment income, contributing to positive net operating income, and surplus growth.”
Coverys, ranked as the sixth largest medical professional liability company in the United States based on direct premium written, is a leading provider of medical professional liability insurance for physicians, hospitals, dentists, podiatrists, and advanced practice providers.
Coverys gets consistent recognition for its superior financial performance by inclusion in the Ward’s 50 for the past seven years. Coverys emphasizes proactive risk mitigation and patient safety programs that help clients anticipate, identify, and manage risk to reduce errors and improve outcomes.