Positive results from Newcastle office will pave the way for new regional model, chief exec says
Towergate Underwriting has revealed its business plan for the coming years, with a focus on consolidating its regional footprint.
In an exclusive interview with Insurance Times, chief executive Clive Nathan said he wanted to replicate the regional model set out by the Newcastle office, which opened in March.
Nathan confirmed that plans to establish a Lloyd’s box were shelved in favour of a focus on the regions, although he would take a “never say never” approach over the long term.
Nathan said the Newcastle office had produced its best set of results last week. “Brokers want to deal with people who understand them and their marketplace, and the nuances of the area they operate in.
“Having somebody in a Newcastle office who really understands haulage risks has gone down exceptionally well with brokers in the North East.”
He also revealed that Towergate Underwriting had increased rates marginally to 5.1% this year, compared with 4.8% this time last year.
He said Towergate Underwriting is “not huge” in the motor sector, where rates have increased rapidly. Greater involvement could have pushed up the result further. “There’s probably a little bit more support in the market,” he said. “We have been realistic in what we can carry on an individual case level. Where we can push a little bit more, we will, and where we can’t, we won’t.”
Last year, Towergate was around 10% off its retention targets that were set in 2008, having walked away from unprofitable business. This year, the company was on track. “You only need to walk away once. We’re not writing new stuff in those sectors around solvents or waste,” he said.
Nathan added that the business has been strengthened by the doubling of its five-strong Maidstone-based pricing and actuarial team last year. The team has focused on improving rating accuracy, spotting emerging risks and identifying sector opportunities.
He said: “Professional let is our worst-performing area. We’ve had to do a lot of work on that. They’ve also identified a snag with oil-heated homes: while this is not a huge part of the market, the average claim is absolutely huge.”
In the wider group, Insurance Times understands that Towergate is keeping its options open for a bond refinancing. It has been encouraged by a glut of successful bond refinances at the end of last month.
In May, Towergate Finance offered a £665m bond issue, maturing in 2017 and 2018, but withdrew the offer because of adverse market conditions.