Tom Broughton, editor-in-chief
Read Ellen Bennett’s interview on page 18 to delve deep inside the mind of Peter Cullum and find out his endgame for Towergate.
It’s not just a personal yarn of what motivates insurance’s most successful entrepreneur. It’s a story of how one company managed to trailblaze its way through a market in the good times, pick up a few industry characters along the way, and then pass over what was tagged as the deal of the decade with the aborted sale of a 25% stake. It prompted the business to batten down the hatches and then ride out the storm, as banks behaved like hooligans and the market enacted a big commission squeeze.
Cullum is clear that the final chapter of the story will begin in 2012 with an IPO, but only if the exit plan can reach fruition. Meanwhile, rival consolidator Chris Giles is thinking along the same lines. We resisted probing into Chris’s mind too, but did take some time to run the rule over his accounts with him.
Giles outlines a shareholder exit plan for 2012, but as a relatively young, second-generation family broker running a Charterhouse-backed business; he wants to continue to drive the business far and beyond. Look past the £22.6m loss reported this week and you will see a 60% growth in earnings before interest, tax, depreciation and amortisation, which is the measure for consolidators. Giles is adamant that the business passes its annual health check and still has an appetite for growth. But the question remains: now that any transformational deal is firmly on the back burner, how patient will Charterhouse be?
Benign but not forgotten
And so the madness surrounding pleural plaques continues. This week, we report
that prime minister Gordon Brown is to meet with campaigning MPs to discuss compensation. This follows the Scottish Court of Session’s rejection of insurers’ bid to stop pleural plaques being compensatable.
The Scottish ruling sets an ominous precedent. Apparently, the judicial and legislative branches of government are willing to fly in the face of all medical evidence and pander to sensationalism, at the expense of the true victims of asbestos, and ultimately all policyholders. If Brown is prepared to join them, insurers have got a multimillion-pound problem on their hands. Let’s keep up the pressure and hope that a Conservative government would be less willing to jump on this runaway bandwagon.