London-based independent broker James Hallam has formed a managing general agent (MGA) to underwrite the bulk of its SME business.

The company also said it had rejected several takeover offers from a number of major UK and US insurers.

The MGA, named Touchstone, is headed by former St Paul Travelers underwriter Ian Stock, with further underwriters expected to be added to the current two-man team.

The facility will initially underwrite James Hallam’s general SME book, but if successful will move on to underwrite professional indemnity SME business.

Paul Anscombe, managing director of James Hallam, said: “The battle for distribution makes prices unrealistic. We want to control our distribution and improve our bottom line.

“With the bread and butter SME business, we are better off operating as an MGA.”

The MGA will, at present, underwrite James Hallam business only.

Anscombe said the broker’s relationships with its insurer partners would remain unchanged. “Insurers are much more open to do these deals with brokers now.

“Conversations we have been having with our insurer partners have been much more to do with our strategic intent,” he said. “There’s been a big learning curve, but it has been a success so far.”

James Hallam controlled about £35m in premiums in 2006 and made a pre-tax profit of £217,291.