Specialist liability adjuster Garwyn has been dealt a blow just months after completing a management buy-out, with the resignation of five members of its management team.

Three branch managers and two assistant managers, who handle liability claims at the company's North West and Midlands' offices, handed in their notices at the end of March.

Garwyn's managing director Declan Treanor said the five employees had "indicated" that they would be setting up a company in direct competition with Garwyn.

He said: "We are sorry to see them go but we still have in excess of 100 liability adjusters in the UK and we have put in place people to cover their work so there will be no adverse effect on the service we give to clients."

An industry source said the resignations were a blow to the company, which had just completed the management buy-out from QBE

He said: "If I was in their position, the last thing I would want is five managers quitting."

But Treanor insisted the departures would not be a "significant loss" and the company would continue with its "forward thinking" approach following its MBO.

He said: "Opportunities have been put our way since the MBO that we were not expecting and we foresee further growth. We have already recruited people to the team and will continue to do so."

Senior management, which included company directors and staff, completed the buyout in December with a deal estimated at £20m backed by Barclays Ventures.

This followed QBE's decision in November 2005 to sell off the loss adjuster because in the long term Garwyn was "not core" to its business.