Founder Peter Cullum lays out path for beating downturn

Towergate chairman Peter Cullum has revealed the consolidator will look to improve commissions as it emerges from the economic downturn.

Cullum, speaking at the Towergate-organised Magic Circle debate in London, said: “The one advantage we do have is that our model enables us to negotiate better terms and conditions as what might be seen as the norm, and we are happy to pass that on to guys who work closely with us.”

The Towergate founder said he would continue to invest in sales and marketing, while keeping costs down.

“We have been through a pretty drastic process of saying ‘We have to reduce costs’. Right now we have reduced those costs.”

Cullum said Powerplace – the technology platform allowing brokers to place commercial lines business direct with underwriters – was a big part of the company’s future.

Powerplace aims to smash the £1bn gross written premium (GWP) barrier by 2012. It currently is around £1.5m a month.

Cullum said investing in technology would help Towergate against competitors such as Direct Line. He said around 39.2% of the very small SME market is controlled by e-trading.

“Online trading will decide the future of the SME market”, he said.

For more read next week’s Insurance Times.