Towergate Insurance has set aside £10.7m to pay future liabilities of its former advice arm.
This was revealed in the company’s results, published today, which showed Towergate had made a loss before tax of £75m in 2016 – lower than the £204m losses it had made the previous year.
But David Ross, the company’s chief executive, said Towergate had now been “stabilised” and is growing its earnings before interest, tax, depreciation and amortisation.
He said: “Today is a milestone moment for Towergate as we close off a hugely significant year for the company.
“We have grappled with some enormously complex legacy and infrastructure challenges whilst laying the foundations for growth which returned in the fourth quarter.
“Fixing our infrastructure has created the chassis that will hold everything together and provide a platform for everything else we are building.
“These results are a testament to the huge effort made by the individuals and teams across Towergate who have focused relentlessly on transforming the business and pursuing opportunities for growth.”
Earlier this year Towergate announced that it would close its Manchester retail unit, meaning 176 employees were put at risk of redundancy.
Since then another 165 have been told they risk redundancy.
Among the reasons for the loss before tax were reorganisation costs of £10.3m in 2016.
In 2015 Towergate Insurance sold its advice arm, Towergate Financial, but retained responsibility for any “historic regulatory liabilities” including consumer redress arising out of past business reviews into enhanced transfer values and Ucis.
Towergate Financial, which included mortgage broker John Charcol, was sold to Palatine Private Equity for £8.6m and has since rebranded as Wren Sterling.
Last year the Financial Conduct Authority fined Towergate £2.6m for failings in relation to its protection of client and insurer money.
damian.fantato@ft.com
