Randall & Quilter reaches deal to take on UK P&I Club's liabilities

Randall & Quilter has concluded an agreement with UK P&I Club, a provider of protection and indemnity insurance and other services to the international shipping community, to transfer the club's occupational disease liabilities, totalling $103.8m, on an undiscounted basis, it announced on Friday.

The AIM-traded firm said most occupational disease claims resulted from seafarers being exposed to asbestos on ships, going back as far as the 1950s.

It explained that it could be 40 years or longer before symptoms of any disease occurred, with those often fatal, and the resulting compensation awards frequently significant.

Those claims were described as “very uncertain and volatile”, with the exposure to continue for a number of years to come.

Randall & Quilter said the transfer of liabilities would be subject to the approval of the High Court in London, which would ensure the interests of those members who were exposed to the claims, and equally the claimants who suffered from the diseases, were not prejudiced by the transfer.

It would also be overseen by the UK insurance regulators, the Prudential Regulation Authority and the Financial Conduct Authority.

In the interim, Randall & Quilter said it had concluded a reinsurance agreement with the club so the benefits of the overall transaction could be recognised by the club's current membership.

The parties expected the transfer to be completed within the next two years.

“We are delighted to enter into this agreement with the UK Club which recognises our experience in this field and follows on from the previous transfer of liabilities from the Liverpool & London Steamship P&I Association in 2015,” said executive chairman Ken Randall.

“Occupational disease liability can negatively impact a Club's capital outlook and risk appetite.

“This transfer agreement will allow the UK Club more flexibility and stability in planning its financial future, while ensuring any claimants remain unaffected.”

Nicholas Inglessis, chairman of the UK P&I Club, added that transferring the claims to a “recognised and well-regarded” occupational disease specialist such as R&Q would “significantly improve” the club's capital position.

“[It will] bring finality to a highly volatile book of claims.

“This will greatly benefit the club's current members.”

At 1035 GMT, shares in Randall & Quilter Investment Holdings were up 1.1% at 138p.