Towergate sees area as a ‘good hunting ground’

Andy Homer, who is stepping down to be replaced by Mark Hodges, the chief executive of Aviva UK, also said that the company’s possible flotation could be two to three years away.

Mr Homer told the Yorkshire Post: “I will stay on as a non-executive, but part of my responsibility is to ‘butt out’ of the way and let Mark get on with it. It’s been fantastic and it’s good to quit at the top. I’m happy to bow out, I’ve done my shift.”

Mr Hodges’s decision to join Towergate, which employs 400 staff across Yorkshire, shocked the insurance industry.

Mr Hodges had been tipped as a possible successor to group Aviva CEO Andrew Moss.

However, he said the opportunity to join Towergate was “irresistible”.

Mr Hodges may lead the firm through an initial public offering (IPO), one of the options it is considering to fund future growth plans.

Mr Homer said key conditions had to be met before a flotation could be considered.

An IPO would only happen when the economy was in a more positive state, and the stock market was stable, he added.

Mr Homer added: “It will happen when the conditions are right and I don’t see these coming together anytime soon.

“It’s certainly not right this year – it could be two to three years out.”

The group, founded by Peter Cullum, is Europe’s largest independently owned insurance intermediary and generates more than £2bn of gross written premiums a year.

It has acted as a consolidator in the industry, acquiring more than 170 underwriting and broking firms since 1997.

It now employs 4,000 staff across 100 UK offices, including eight sites in Yorkshire.

In January, Towergate attracted £200m investment from private equity firm Advent Internation- al.

The group also issued £520m in corporate bonds and agreed a new £90m acquisition fund.

Income last year rose 12 per cent to £361m, while operating profits increased by 18 per cent to £139m.

“Yorkshire is a good hunting ground for us,” Mr Homer said.

“I used to work for CU (Commercial Union) in the 1980s and lived in Adel in Leeds, so I know Bradford, Leeds and Sheffield pretty well.

“We have not got much in South Yorkshire. There are some good broker businesses in Sheffield but we have never found one that suited.”

Mr Homer said there was the opportunity for organic expansion in Leeds, while Cullum Capital Ventures, a sister company to Towergate, could be announcing an acquisition in Yorkshire in the next few months.

Mr Homer said Advent had a significant minority stake in the business.

He added: “Advent can attract people of Mark Hodges’s calibre to come on board and drive things forward.”

Major presence in the region

Towergate’s underwriting division employs almost 200 staff in Yorkshire.

It has two offices in Harrogate, one in Stokesley and one in Leeds.

In 2007, Towergate agreed a £95m deal to buy Harrogate-based Broker Network, which acts as an umbrella network for small insurance brokers.

Andy Homer, Towergate’s outgoing CEO, praised the entrepreneurial drive of Peter Cullum, the company’s founder. He said: “Peter is one of those guys, who until they stick him in a coffin, will be strategising and working out the next move.”