Towergate owner secures its futue capacity providers amid shake up
Ardonagh has revealed a massive shake up in its MGA and services arm, part of the business which includes the old Towergate Underwriting name.
It means Ardonagh continues to secure its A-backed capacity providers on underwriting, who had seen underwriting ‘adversely performing’ on losses.
The tough action has already led to lower loss ratios.
But an impairment charge on the goodwill balance pushed the MGA and services divisional loss from £6.5m to £87.4m, on a reported basis.
Geo Underwriting boss Paul Dilley is shaking up MGA and underwriting
The 2017 results reveal:
- A £76.8m impairment charge on underwriting due to legacy issues needing fixing and being accounted
- Rate increases of 10% and exits of around £1m on long-term unprofitable business
- Increasing its focus on niche and specialist segments within personal and commercial lines
As well as the corrective action, Ardonagh is ploughing investment into its underwriting capabilities.
Staff have received training and upskilling. Money is being spent on upgrading IT in personal lines and agriculture.
The MGA and services arm includes the old Towergate Underwriting, Fusion and Arista names - now falling under the Geo brand.
Arigculture names AIUA and BIBU fall under the Geo Agriculture brand.
Direct Group is also part of MGA and services arm. Direct Group is frequently contracted by insurance firms to manage policy administration, clamis handling and help develop new products.
Ardonagh says the corrective action, investment and new launches has already boosted performance.
”Downward income pressure has been experienced as remediation initiatives on legacy business and delayed capacity influence new business levels. The segment launched London market and European propositions (targeting niche/speclaity lines and focusing on long term sustainable profitability) that have enabled a number of new products to being activity trading.
”Embedding an underwriting culture that has been a critical focus across 2017 with encouraging development seen on the loss ratios in response to the remedial actions taken,” Adronagh says in its 2017 results.
The MGA and Services arm was the least strong divisional performance in an overall solid result from Adronagh.
The other divisions - wholesale, corporate and disribution - improved organic growth and were boosted by acquisitions.