Towergate to merge with four UK insurance firms forming an "independent market leader"

Oliver Gill
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Towergate currently has 200 specialist insurance policies designed for businesses, properties and passions (Source: Getty)

Insurance firm Towergate is to join forces with four other firms in a shake-up of the UK insurance sector.

US private groups HPS and Madison Dearborn (MDP) will merge the firms they already own into one company.

Autonet, Chase Templeton, Ryan Direct and Price Forbes will join Towergate.

Read more: City watchdog fines Towergate and former director

David Ross, currently the chief executive of Towergate, will take overall control of the newly merged entity. The former head of the Financial Services Authority, John Tiner, has been appointed as chairman.

The new group is expected to generate around £2.8bn of gross written premiums and employ more than 5,000 people.

“The coming together of these companies under a single holding company is a major milestone for the HPS and MDP insurance platform," said Ross.

Meanwhile, Tiner added the merger showed the firms' US private equity backers had "tremendous confidence" in the future of the businesses and provided "opportunities for further expansion".

Read more: Towergate sees income fall to £87m in third-quarter results

Each of the firms will retain their existing leadership teams and "continue to operate independently".

The five firms were previously owned through holding companies Nevada and KIRS. Today's deal means the firms will be brought under the KIRS banner.

Nevada, which currently owns the Autonet and Price Forbes businesses, will be sold to KIRS for a consideration of £255m.

Who's who? The five firms joining forces

Towergate Group – employs around 4,000 people. Provides insurance products to small and medium sized enterprises, corporate clients and specialist personal cover. It also has an advisory business; a London broking and underwriting platform.

Autonet – A van insurance broker. Distribution is primarily online through price comparison websites, its own website and call centres. Gross written premiums in 2016 were around £130m. The firm is based in Stoke-on-Trent and employs over 550 people.

Chase Templeton – a Darwen-based private medical insurance brokerage services provider with £157m of gross written premiums in December 2016.

Ryan Direct Group – Doncaster-based firm that providing underwriting, claims management and policy administration services. Employs more than 540 people with particular expertise in the specialist and niche personal lines sector across all of its products and services.

Price Forbes – established in 1893, Price Forbes is an independent, specialist international wholesale insurance Lloyd's of London broker that employs over 300 staff with over £950m gross written premium.

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