£81m premium managing general agent boosts broker’s own MGA
Towergate is poised to buy commercial managing general agent Arista from Canopius, Insurance Times has learned.
The acquisition would be a powerful boost to Towergate’s underwriting arm.
Towergate Underwriting received more than £615m in gross written premium in 2012, compared to Arista’s £81m.
The division is one of its most profitable and is in growth. It reported a 2% increase in revenues to £69.7m in the first nine months of 2013, (9M 2012: £68.2m).
However it made earnings before interest, tax, depreciation and amortisation of £30m - down 5% on the £31.6m it made in the same period of 2012.
Arista is 75% owned by Canopius, which bought a 25% stake from Equity Red Star last July. Arista’s management maintained a 25% share in the company at the time of the deal.
Arista deals with 398 brokers, according to its most recent set of accounts, and underwrites range of commercial insurance products, including commercial combined, motor trade, professional indemnity and property owners’ cover.
Canopius provides the core of its capacity for commercial property, liability and motor business. Arista is also an appointed representative to ARAG, HSB and Hiscox for other classes of insurance.
Writing in the companies annual results statement in May, chief executive Charles Earle said: “I believe that Arista is more effective and agile than many larger competitors, and I also recognise that we can achieve much more. We have stretching goals and significant energy behind our desire to deliver more to the broker that values an Arista agency and to the insurer that values our underwriting and distribution capabilities.”
Arista reported earnings before interest, tax, depreciation and amortisation (EBITDA) of £1.7m in 2012, up 28% on 2011’s £1.3m.
The profit boost was driven by a 9.4% increase in gross written premium (GWP) to £81m (2011: £74m) and a 9% rise in turnover to £12m (2011: 11m).
Arista was founded in 2007 by chief executive Charles Earle and former NIG commercial lines director Lyn Carslake.