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Sean McDermott
Executive Director
Quest Group
T: +44 (0) 20 7015 8655
E:smcdermott@quest-group.co.uk



Graham Combes
Executive Director
Quest Group
COO Quest Consulting
T: +44 (0) 20 7015 8652
E:gcombes@quest-group.co.uk

  
Investing in Run-off? Quest Investments
  • Non-life and life (re)insurance businesses that are closed to new business are attractive to acquire as investment opportunities. They are available where, for certain insurance groups, they are viewed as non-core, they tie up capital and are ultimately negatively impacting rating agency assessments and share price.

  • Life insurance is substantially an investment business and closed life funds have embedded value linked to future premium flows from investment products that have been sold prior to closure. On disposal value is released from administrative cost savings and transaction financial engineering.

  • Conversely, non-life insurance is essentially a liability business. A closed non-life business, known as run-off, has tied up capital together with assets to cover future run-off management expenses and (re)insurance liabilities. Value release akin to the release of 'embedded value' can be achieved through:

    1)
    		  

    transaction structuring that releases value for
    vendor and acquirer
    2)
    		   proactive claims management that accelerate the run-off thus making savings on run-off cost provisions
    3)
    		   present value and other discounts on early settlement
    of claims

    4)
    		   early release of tied-up capital in regulated entities

  • Quest Group has the specialist skill sets to release this value and can partner with financial investors to provide solutions for vendors. If you are a capital investor and would like to know more about Quest Group's approach to the acquisition of run-off businesses please contact us.