Towergate has completed its purchase of Paymentshield.
Under the terms of the deal, Paymentshield will remain an independent business. It now becomes a sister company of Towergate Partnership, Europe’s largest independently owned insurance intermediary.
This follows the management buy-in in 2004 led by Paymentshield’s chief executive offficer, Stuart Pender. The deal represents a successful exit for Bank of Scotland Corporate who backed the original buy-in as the single largest investor. Over the past three years Paymentshield has tripled the number of mortgage general insurance policies sold. It has now established itself as the sector’s market leader for buildings & contents and MPPI business with an annual gross written premium in excess of £200m. In April 2006 it was ranked by The Sunday Times as one of the top 100 Fastest Growing Companies in the UK.
Further to this announcement, Paymentshield also today confirmed that Royal & SunAlliance (R&SA) will become its Buildings and Contents insurance underwriter and Norwich Union will underwrite its MPPI products. In addition, DAS will become directly responsible for underwriting home emergency and legal cover.
Paymentshield announced in the spring that it was reviewing its existing underwriting contracts as part of its ongoing commitment to supply highly competitive products to the mortgage intermediary sector. Paymentshield will continue to have full control over both the agency and underwriter relationships when they come into effect in January 2007.
Commenting on the purchase of Paymentshield, Peter Cullum, Towergate’s executive chairman explained: “The fit with Paymentshield is excellent. They are committed to distributing through professional intermediaries, and we already have experience of providing leading insurance products to financial advisors through some of our existing operations.
Commenting on the deal, Stuart Pender said: “This is a very exciting new phase in Paymentshield’s development. We have built our business on our commitment to offering a highly competitive and compelling proposition in the intermediary market, and Towergate is the ideal partner to support us in continuing to develop and enhance this proposition. We have an aggressive organic and acquisition-led growth strategy, supported by the scale, skills and access to capital under the Towergate umbrella, whilst at the same time, retaining our independence.
“We are also delighted to announce our new underwriting partnerships. This follows a comprehensive and rigorous tender process. We as a company have gone through a tremendous period of growth recently, and the process of re-evaluating our underwriter relationships was critical to this continued progression.”
Mr Cullum added: Paymentshield has a very strong Management team that is capable of reaching a set of ambitious growth plans – this business could realistically double within three years. The fact that they are retaining a significant financial interest in the company is tangible evidence of their commitment and fits in with our ‘owner-driver’ philosophy. The company will continue to run under its own identity but will benefit from the opportunity to tap into the widest insurance product range in the market to enhance their customer proposition.“
Frank Summers, director of integrated finance Scotland at Bank of Scotland Corporate added: “Over the last two years, the management of Paymentshield have driven their business forward. Like all our Integrated Finance deals, management maintain control and decide on exit strategies. We are delighted with this result.”
Julie Hopes, managing director, Affinity Business at R&SA said: “Paymentshield is a very strong business, with an excellent reputation in the intermediary sector and we are delighted that R&SA has been selected as their Buildings and Contents Underwriter. We have an excellent track record in the GI market, and working with Paymentshield gives us a great opportunity to further increase our profile in the intermediary sector.”
Kenny Leitch, director of Creditor Insurance at Norwich Union Insurance adds: “We are very pleased that Norwich Union will be the new underwriter for Paymentshield’s MPPI products. We are looking forward to working with them to our mutual benefit.”
“This is a fantastic opportunity to build on our existing relationship with Paymentshield” comments DAS corporate partnerships manager, Andrew Parkinson.
The Management of Paymentshield were advised by Dow Schofield Watts LLP