Underwriting agency confident of reaching binding agreement with RSA despite notice being served by the insurer.
Towergate is set to overhaul its troubled underwriting agency Fusion, starting with the departure of its two bosses last week.
Peter Cullum, Towergate executive chairman, announced the departures of Kevin Pallett and Geoff Crisp on Friday. Sources close to Towergate said both Pallett and Crisp were given ‘honourable deals’ on leaving the company.
Last month Insurance Times revealed that RSA, one of Fusion’s panel of four leading commercial insurers, had served notice on its binding agreements with the company. It is believed that other insurers have been considering their arrangements with Fusion.
A source close to Towergate said it was unclear whether it would come to terms with Norwich Union given chief executive Igal Mayer’s tough stance on commissions for consolidators.
In a statement, Cullum said that Fusion’s capacity for the next three years was oversubscribed, and he expected to confirm arrangements by the end of September after holding positive talks with insurers.
Clive Nathan, chief executive of Towergate Underwriting, is set take a more hands on role in Fusion and will work closely with its management team, including Stuart Pettet, one of Fusion’s founding directors.
Nathan said: “The management changes are more about looking forwards, not backwards – with the next three-year consortium and plan being put in place, it seemed simply the right time for all to move on.
“The Fusion management team is extremely capable and we look forward to expanding their offering to brokers and build on what has been achieved so far.”
He added: “Looking ahead, our discussions with potential future consortium members have been constructive and positive and we are in advanced talks with our preferred shortlist.
“I think it is recognised that Fusion is a high quality business that offers brokers and their clients a high degree of value and has risk management at its core.”
Nathan concluded: “When the hard markets come, MGAs that just sell on price will inevitably lose capacity and the likes of Fusion will really come into their own.”
