Towergate reports pre-tax loss in H1

Towergate Insurance reported modest rises in its half-year results today, covering the six months to 30 June 2013. However, a write-off of loan fees wiped out any pre-tax profit.

The group’s GWP hit £1.58bn, a 1% increase on H1 2012, while group income rose 3% to £225m. The income rise was driven by strong growth in its retail (6% growth) and underwriting (4%) divisions, but was undermined by a 27% reduction in income from its network division.

Towergate made 10 acquisitions during the first six months of 2013, which contributed to a 1.3 percentage point increase in the group’s expense ratio.

But the major change in Towergate’s balance sheet was its pre-tax result, which showed a loss of £9.9m, down from a pre-tax profit of £10.2m in H1 2012. The firm cited a £14m write-off of loan fees from a previous debt structure as the primary cause.

Towergate group chief executive Mark Hodges (pictured) said: “Our focus on building top-line growth continued to gain momentum during the first half of 2013 and the strong performance of the retail and underwriting divisions was particularly encouraging against a continuing difficult market backdrop.

“During the period, we completed 10 acquisitions and a successful refinancing. We have continued with the implementation of our change programme focusing on our new business and retention performance and the delivery of long-term efficiency improvements. Despite the reduction in network operating earnings, we believe that the business, the clear market leader in its field, has a significant role to play across the group.

“We have a unique business model, combining scale and breadth of distribution with market-leading positions in both specialist personal lines and SME insurance, and we head into the second half well positioned to deliver profitable growth in our chosen markets.”

Towergate H1 2013 results

Divisional performances