‘We have to be realistic’ as tough conditions continue
After securing new capacity arrangements for its managing general agency (MGA) Fusion, the head of Towergate commercial underwriting said he is cautious about growing the business in the current tough trading conditions.
Fusion announced last week it had secured five-year capacity deals with Allianz, RSA and QBE.
Chief executive Scott Brown said: “We are looking for Fusion to grow but you have to be realistic about the levels of growth you can achieve in this market. Continuing to add to the product range will be the main driver for growth.”
RSA and Allianz will provide capacity backing products such as commercial combined, property owners and liability. QBE will back corporate products.
Fusion is the largest division of Towergate Underwriting, writing around £100m in gross written premium. A large part of the business is written in the ferociously competitive SME space, in which insurers have struggled to achieve rate rises.
Allianz underwriting director Neil Clutterbuck said the insurer was reviewing all its capacity arrangements, but was pleased to keep on with Towergate.
Another division of Towergate Underwriting, Towergate Underwriting Household, has also signed a capacity deal with Cardiff Pinnacle, AXA Personal Lines and Allianz.
One of the capacity providers, AXA, had been cautious about committing to MGA capacity deals. Former UK chief executive Philippe Maso was generally suspicious of MGAs and pulled out of several deals. Maso believed MGAs wrote new business for volume rather than profit.
But his successor, Paul Evans, is more relaxed about MGAs and believes deals can work as long as there is a tight focus on the MGA making profits for the insurer.
AXA managing director, intermediary and partner sales Mike Keating said: “AXA has built a strong and successful trading relationship with the Household team. We look forward to developing this further.”