Dispute with Zurich continues to rage as broker launches investigation

The long-running row between the Towergate Partnership and Zurich has taken another twist, with the broker alleging it has lost business as a result of the insurer's letters to Towergate clients.

Last month Insurance Times revealed that Zurich had written to Towergate clients telling them not to do business with the broker.

The insurer later sent a letter of apology to Towergate and its clients and suggested a meeting to resolve the matter after Towergate chief executive Andy Homer threatened legal action (News, 14 July).

But the meeting has now been put on hold pending an investigation into the loss of business.

A source close to Towergate said: "We have cases of lost business as a result of Zurich's intervention and the letter to Towergate clients.

"And then the letter of apology sent out caused more confusion."

Towergate's next step will be dependent upon the outcome of the investigation, said the source.

The situation was unearthed as Towergate's review of its business as part of the merger of Folgate and Towergate and while looking to acquire other businesses to add to its portfolio.

The conflict follows a history of bad blood between the two companies following similar bust-ups last year when what was then Folgate claimed that Zurich had cancelled Folgate's commercial agency. Zurich then counter-claimed that it was exiting the arrangement via "run-off".

"This is an issue that goes back to Folgate and is now having an impact on the new Towergate business. I wish [Zurich] would just leave us alone," said the source.

The integration of Towergate and Folgate and the run-off of Folgate agencies will be completed this month.

The source added: "We take a dim view of this.

Other brokers will look at the situation with their clients and say 'this could happen to me one day'."