Management: With Towergate’s larger-than-life founding duo taking a back seat, the consolidator – and perhaps the insurance industry – will never be quite the same.
Peter Cullum has stepped down from chairman to non-executive deputy chair, and been replaced by Admiral chairman Alastair Lyons, while Andy Homer is due to retire as chief executive and remain on the board as a non-executive director. Mark Hodges, who recently resigned as chief executive of Aviva, will take over.
All this is about bringing in a management team with listed company experience in preparation for flotation in three to five years – although the upheaval has also sparked a number of departures.
Strategy: The £200m cash injection from private equity house Advent in February 2010 was a coup for Towergate. The resulting £90m acquisitions war chest was first deployed in June, with the purchase of BWA (Insurance Services). Expect more acquisitions soon.
Meanwhile, in May the broker announced it had cut its net debt levels by £16.3m to £463.8m in 2010 and reduced its 2010 losses to half 2009’s level. Towergate made a loss after tax of £14.2m for 2010, compared with £28m for the previous year. Its pre-tax earnings, which the firm argues is a more accurate reflection of its performance, increased 18% to £139m in 2010 from £118m the previous year.
Big story: Big hitter departures, including those of deputy chief executive Amanda Blanc last year and operations director Max Carruthers in July – both to AXA – were bitter blows.
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