Accounting roles to move from branches to centres in Leeds and Maidstone

Towergate has informed staff of proposals to make all 240 members of the accounting teams across its branch network redundant, Insurance Times has learned.

A confidential internal announcement sent this morning by group chief executive Mark Hodges said Towergate planned to centralise accounts functions to two centres in Leeds and Maidstone.

Forty central jobs would be created, which Hodges said would empower more front line staff to focus on customers.

“These changes support the delivery of our strategy and have not been taken lightly. This is part of the continued transformation of the Towergate Group and the changes will enable more front line staff to focus their efforts on Towergate customers,” the email said.

The extra roles will be added to Towergate’s centre for Insurance Broking Accounting (IBA) in Leeds and supported by the divisional accounting hub in Maidstone.

The branch-based accounts staff, who are in a period of consultation, face redundancy if alternative roles cannot be found within the group.

A Towergate spokeswoman said: “The centres of excellence will form an important part of our ongoing transformation of the business. The creation of dedicated and highly specialised teams will strengthen our finance function, providing operational benefits whilst enhancing the customer experience.

“We don’t take these decisions lightly but believe the changes announced today are essential in developing a finance strcuture that will best support the future growth of our business.”

One Towergate insider predicted the changes would cause “absolute chaos”.

“To get 40 new central staff to guess what 240 local staff do everyday would be absolute chaos. It will be detrimental to every insurer, broker and insured,” the source said.

But one broker chief executive said: “They probably should have done it years ago.

“It’s rotten for people in the branches but it’s a job that can be done anywhere. A lot of the time the job is looking at invoices and statements from insurance companies, making sure they reconcile and pressing the button. I’m surprised they haven’t done it already.”

Bluefin chief executive Stuart Reid said centralising account functions was “absolute good business sense”.

Hodges is under pressure to reduce expenses after Towergate reported a 3% drop in earnings before interest, tax, depreciation and amortisation (EBITDA) to £116m in the first nine months of 2013. Group expenses increased by 13% to £230m in the same period.