But business remains in group as Towergate Insurance Brokers shifts to a direct relationship with capacity provider Hiscox
Towergate Underwriting has closed its financial risks unit, which managed £10m of gross written premium, Insurance Times can reveal.
The unit’s closure affected six staff: two have taken other roles within the Towergate group, while four have now departed.
Towergate Underwriting Financial Risks (TUFR) handled mainly professional indemnity (PI) business brokered by Towergate Insurance Brokers.
The closure was triggered by Towergate Insurance Broking shifting to a direct relationship with TUFR’s main capacity provider, Hiscox, leaving the MGA out of the loop.
The division had already been hit by RSA’s withdrawal from several classes of professional indemnity business last year, which had cut TUFR down to £10m GWP from roughly £17.5m.
But while Towergate Underwriting will no longer benefit from the PI business written by TUFR, Towergate chief executive of bespoke underwriting David Bruce stressed that the business has remained within the wider group as Towergate Insurance Broking still handles the clients.
He told Insurance Times: “The business hasn’t been lost to the group – where it has been handled within the group has changed.”
He said that the group had retained “the vast majority” of the £17.5m GWP that TUFR once wrote as Towergate Insurance Brokers handles the clients.
Bruce added that TUFR’s closure did not signal Towergate Underwriting’s exit from PI business. He said: “We will look at the best way to sell PI going forward. It is not about a market exit at all. Quite the reverse.”
When RSA pulled PI capacity from TUFR last year, Hiscox, already a capacity provider, took on a large part of this, with the rest going to other carriers.
At that time, some of the business shifted to a direct relationship with Towergate Insurance Brokers, reducing TUFR’s GWP to around £10m.
The remainder of that business has now passed to Towergate Underwriting.
In addition to the RSA capacity withdrawal, Towergate Underwriting’s PI business lost managing director Peter Newson and four team members last year. The team have now joined JLT’s underwriting agency Thistle.
But Bruce insists the team’s departure had no bearing on the decision to close TUFR.
Bruce said: “Peter or people moving on was no factor whatsoever.”