R&Q Insurance announces sale of Inceptum Insurance to Marco Capital for £11.2m

R&Q Insurance Holdings Ltd (AIM: RQIH), a key player in the insurance industry, has entered into an agreement to sell its subsidiary, Inceptum Insurance Company Limited, to Marco Capital Holdings Limited, a legacy acquisition group based in Malta. This transaction, valued at £11.25 million in cash, marks a significant move in the legacy insurance sector.

The sale of Inceptum is contingent on the completion of the previously announced sale of shares in Accredited to Onex, along with certain reinsurance agreements being novated to Marco Re Limited, part of Marco Capital. The transaction has secured the necessary approvals from the R&Q board and is now awaiting regulatory approval, including a change of control from the UK’s Prudential Regulation Authority (PRA) and other relevant authorities.

As of 31 December 2023, Inceptum reported net assets valued at £19 million but incurred a loss of £2 million for the year. The agreement not only involves the sale of 100% of Inceptum’s shares but also includes the transfer of various reinsurance arrangements related to R&Q entities. The overall transaction is poised to bolster R&Q’s liquidity by an estimated £13 million, reflecting both the sale and the impact of the novated reinsurance agreements.

This divestiture aligns with R&Q’s strategic repositioning within the market, aiming to streamline operations and enhance financial flexibility. The liquidity generated from this transaction will support R&Q’s ongoing business initiatives and strengthen its financial base.

The completion of this transaction is anticipated in Q3 2024, subject to fulfilling all regulatory requirements. This sale is expected to not only provide immediate financial benefits to R&Q but also allow the company to focus more on its core areas and future growth opportunities.

The sale of Inceptum to Marco Capital Holdings reflects a well-strategized move by R&Q to optimize its asset portfolio and improve its financial health. This transaction showcases the dynamic nature of the legacy insurance market, where strategic divestitures are employed to realign corporate strategies and enhance shareholder value.