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Important information: The value of investments can go down as well as up so you may get back less than you invest. Investors should note that the views expressed may no longer be current and may have already been acted upon. This is a third-party news feed and may not reflect Fidelity’s views.

R&Q Insurance shares plummet on weak guidance

(Sharecast News) - R&Q Insurance, the AIM-listed non-life insurer, lost almost half of its market value on Friday after announcing it would report a "significant pre-tax loss" for last year. The Bermuda-headquartered company said the new guidance was a result of adverse developments in the Legacy division and a big increase in corporate costs in relation to the sale of its Accredited division.

R&Q Legacy is expected to realise "adverse development of ~23% of the group's net reserves" for 2023.

Reserves under management in R&Q Legacy were around $1bn by the end of 2023, though this will fall by $670m after the sale of the corporate liabilities joint venture with Obra for $27m.

"Although we believe that the corporate liabilities market continues to represent an attractive long-term opportunity, developing regulations, including potential changes around capital requirements, have reduced the strategic attractiveness of direct equity participation in joint ventures of this type for R&Q," said chair Jeff Hayman.

The stock was down 45% at just 3.03p by 1101 BST.

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Important information: This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice. When you are thinking about investing in shares, it’s generally a good idea to consider holding them alongside other investments in a diversified portfolio of assets. Past performance is not a reliable indicator of future returns.

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