Three GI deals set for completion by Christmas, with more for early 2007
Towergate is set to begin an aggressive push into the IFA sector following a £250m financing deal with HBOS and Lloyds TSB.
The consolidator said it would continue to focus on general insurance, but the war chest would also be used to build up its IFA offering.
It follows Towergate's £10m acquisition of THB's IFA, THB Financial Services, and sport broker specialist, THB Clowes (see page 8).
Peter Cullum, executive chairman of Towergate, told Insurance Times that the group would complete a further three deals before Christmas and had a series of acquisitions lined up in the first quarter of 2007.
Those acquisitions, said Cullum, were likely to be of brokers with £10m GWP, but there is a possibility that the company could replicate its £180m takeover of Paymentshield.
Cullum said: "There may well be another Paymentshield, but typically our acquisitions would be around the £10m premium mark. We expect to make a couple of big £100m premium acquisitions."
Towergate is set to achieve £1.8bn gross written premium by the end of 2006, slightly below the forecasted £2bn. "In a soft market it is a challenge to stay ahead. It would be daft to say that the soft market will end in 2007."
But, added Cullum: "We remain optimistic that we will hit our forecasted £3bn target by the end of 2007."
With the senior executive team actively encouraged to invest equity into their managed subsidiary Cullum was confident that Towergate would continue to thrive. This year Towergate has created 40 paper millionaires.
Last week, MGA's decision to issue £100m of preference shares saw 35 executive managers enjoy a massive pay-out.
Organically, Cullum predicted, Towergate will write £300m to £400m in new business next year.
He categorically denied that Towergate would venture into an IPO in the next two to three years and neither were there plans for RBS to withdraw from its 2.5% stake holding in the company imminently.
"I was surprised they wanted to keep 2.5%, I don't think they would want to keep it forever," Cullum said.
"With a significant stake in Towergate RBS will stay in a favourable position for some time."