Towergate raises £26m to fund transformation plan
Broker Towergate Insurance revealed in its third quarter results that it has raised £26 million using a five-year facility secured on certain legacy assets of the group.
The money will be used to fund the transformation plan, kick-started in 2015 but still underway.
Its plans around “fixing the business” include continued investment in IT and other infrastructure upgrade projects and annualised cost saving initiatives, which have steadily increased quarter on quarter to a total of £39m.
The company also said that revenue decline has slowed despite the backdrop of challenging market conditions largely due to improvements in staff retention and engagement. It said this has been complemented by a number of strategic new hires.
It said its insurance broking business is making considerable headway with its turnaround plan in a number of areas. An advisory panel is now in place and agreements have been finalised with the top six insurers which make up over 50 percent of its premiums.
In its underwriting business, it added that actions are underway to ensure long-term sustainability of our business, including focusing on specialist product lines. In the quarter, it successfully re-broked £150m gross written premium of insurer capacity, the company said.
It also confirmed that Madison Dearborn Partners is now its second largest shareholder after the US-based private equity firm, through its investment vehicle Tango Investments, purchased all the shares in Towergate’s holding companies, Sentry Holdings and TIG Topco.
Madison Dearborn joins HPS Investment Partners, KKR Credit Advisors and Bain Capital Credit as Towergate shareholders.
“Earlier this month I was delighted to announce that Madison Dearborn Partners had become our second largest shareholder following the success of their public tender offer. With MDP now on board alongside HPS and our other long term shareholders, Towergate has an ever more potent combination of corporate power and entrepreneurial spirit, which leaves us all very excited by the future that lies ahead,” said David Ross, chief executive of Towergate.
