London-listed R&Q has announced this morning that it has agreed a $146mn ground-up loss portfolio transfer (LPT) with an unnamed US risk retention group (RRG).

R&Q’s wholly-owned US subsidiary, Accredited Surety & Casualty, has provided the cover which covers commercial auto liability risks.

It is believed to be the largest US legacy transaction struck by R&Q in 2018 and the reinsurance provides $146mn of ground-up limit for the RRG whose unpaid liabilities are estimated to be in excess of $100mn.

R&Q’s founding chairman and CEO Ken Randall said the transaction was evidence of the group’s commitment to the RRG market.

“This loss portfolio transfer adds to our continued development of legacy solutions for risk retention groups within the US and is our third risk retention group transaction within the past year,” he explained.

Randall added: “This transaction confirms our penetration into the larger value legacy space which we hope to build on going forward.  

“We are excited to expand our capabilities using Accredited Surety & Casualty to provide legacy solutions for RRGs, self-insurers, and corporates within the US.”

Accredited Surety & Casualty is R&Q’s fully admitted US insurer which acts as a platform to write legacy business and also fronting business on behalf of MGAs. It has an A- AM Best financial strength rating.

An RRG is a self-insurance structure unique to the US. The structure was born out of the casualty crisis of the mid-1980s enabling firms to form on-shore captive-style insurers for long-tail risks.

Separately, the firm said it is seeking permission from its shareholders to increase its maximum borrowing powers from £100mn to £200mn because the current limit is “unduly restrictive”.