Tom Broughton, Editor

So what exactly does the future hold for Towergate? Patrick Snowball’s departure from the board is logical given that its plans to float appear to be have been scrapped or put on hold. Insurers, led by Norwich Union, are turning the screws on commissions and the borrowed money on which Towergate’s foundations are built is getting more expensive by the day. Meanwhile, you have a new breed of entrepreneur looking to exploit an opportunity if and when experienced executives fall out of their restrictive covenant agreements in search of a new beginning. And that’s as well as the likes of growing players such as Group Direct (see News) openly admitting that their strategy is ‘anti consolidator’ as they hail the end of the era of highly leveraged brokers and gain the backing of new wealthy investors. Much will depend on how the economy performs over the next two years. If a full-on recession ensues then Towergate will probably focus on its international expansion and consolidating its loans. However, if inflation and interest rates stabilise and cheap money returns to the market then it will no doubt look seriously again at its refinancing options or a flotation. Alternatively there are always relatively easy options. Organic growth is the cheap choice. But there are also plenty of foreign investors wanting a UK foothold and exit cash could be raised quickly by systematically selling off bits of the business when the market does eventually begin to turn. Whatever the case, there appear to be a few more chapters in the Towergate story still to be written, but it might just not make the most comfortable of reading for all involved.

This week we begin the first instalment in our three-part ‘Insurers in the spotlight’ series. The series will look in turn at the core issues of tax, regulation and the choice of strategic options that insurers’ are faced with. Following on from the Chancellor’s meeting with the ABI last week to discuss the UK’s competitiveness, we have focused in this first instalment, on pages 14-17, on the issue of taxation and what it really means for UK insurance.