Loss-making Keychoice MGA transfers business to Towergate

SSP has transferred the business from its loss-making Keychoice Underwriting commercial lines managing general agency to Towergate Underwriting.

SSP said the MGA, which started writing in September 2010, had “struggled to achieve the scale” amid tough economic conditions and heavy competition.

Under the arrangement, a dedicated commercial team in Towergate’s Colchester officer will write business for KeyChoice Underwriting on a white-label basis. Towergate will handle underwriting, pricing, administration and claims handling on behalf of Keychoice.

Keychoice Underwriting managing director Jonathan Davey said: “Since Keychoice Underwriting started trading in 2010 the business has successfully developed relationships with over 270 agents. However, the ongoing UK recession, fierce competition and continued soft market has meant that the business has struggled to achieve the scale needed to provide the range of products our members are demanding.”

Keychoice Underwriting was incorporated in December 2009 and started operating on 17 September 2010. In its first 16 month period to 31 March 2011, the company made a loss of £1.6m as its small initial turnover did not cover start-up costs, Companies House filings reveal.

However, Keychoice believes the deal with Towergate will result in a “significant increase” in the number of Keychoice Underwriting-branded SME commercial lines products available.

“Brokers have told us that access to a wider range of unique products is a top priority for them. This partnership with Towergate will help us achieve this much quicker than we would be able to on our own,” Davey said.

Towergate Underwriting chief executive Clive Nathan added: “We are very excited to be entering into a strategic partnership with Keychoice, helping it to expand its presence in the SME segment. Towergate has huge experience in developing and delivering high quality white labelled products and first class service to brokers who’ll continue to get immediate access to high quality underwriting expertise.”