Further strong momentum in PM division reported
The consistent performance by R&Q’s Program Management (PM) division puts it comfortably on track to achieve its stated targets and our forecasts. As an operationally geared operation, we anticipate a notable step-up in profitability as Gross Written Premium (GWP) builds on the back of a larger program base.A positive Group outlook is supported by the creation, announced in September, of Gibson Re, a ‘sidecar’ which transforms the group’s Legacy division into a what is effectively an asset manager, generating fee income by assembling legacy portfolios and managing them on behalf of third parties.
PM continues to deliver, while the creation of the new restructured Legacy division will move its contribution away from substantial but opaque, deal-by-deal based profits. Progressively, R&Q’s rating will shift to an EBIT multiple for both divisions, although the latter will really kick-in as Gibson Re’s book scales up over the next 12 months.
We maintain our 240p/share fair value assumption on the back of this latest, encouraging update on progress.
Gallagher (Arthur J.) is a holding company. Through its subsidiaries, the company provides insurance brokerage, consulting and third party claims settlement and administration services to both domestic and international entities. The company's segments are: brokerage, which is primarily comprised of its retail and wholesale insurance brokerage operations; risk management, which provides contract claim settlement and administration services for enterprises and public entities that choose to self-insure their property/casualty coverages and for underwriting enterprises that choose to outsource their property/casualty claims departments; and corporate, which manages its clean energy and other investments.
Brown & Brown is an insurance agency, wholesale brokerage, insurance programs and service organization. The company's segments are: Retail, which provides a range of insurance products and services, and non-insurance risk-mitigating products; National Programs, which provides professional liability and related package products, a range of insurance products, and flood coverage, and targeted products and services; Wholesale Brokerage, which markets and sells excess and surplus commercial and personal lines insurance; and Services, which provides insurance-related services, including third-party claims administration and medical utilization management services, as well as Medicare Set-aside services.
Marsh & McLennan Companies is a holding company. Through its subsidiaries, the company provides clients advice and solutions in risk, strategy and people. The company provides analysis, advice and transactional capabilities to clients. The company conducts business through two segments: Risk and Insurance Services, which includes risk management activities (risk advice, risk transfer and risk control and mitigation solutions) as well as insurance and reinsurance broking and services; and Consulting, which includes health, wealth and career services and products, and other management, economic and brand consulting services.
Randall & Quilter Investment Holdings is a holding and investment company. Through its subsidiaries, Co. acts as owners and managers of insurance companies, live and in run-off, as underwriting managers for insurers, as participators and managers of Lloyd's syndicates, as purchasers of insurance receivables and as service providers to the non-life insurance market. Co.'s has 3 segments: insurance investments which acquires and assumes legacy portfolios, insurance debt and provides capital support to Lloyd's syndicates; insurance services which provides insurance related services; and underwriting management, which provides management to Lloyd's syndicates and operates underwriting entities.
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