Towergate, the troubled insurance broker bailed out by new investors, has overhauled its board with staff from an international rival.

Interim chief executive Scott Egan has wasted no time in transforming the management of the Maidstone-based insurer, which had its £1 billion debt reduced by 60% when it was taken over by a group of its bondholders last month.

It has poached several big figures from US rival Arthur J Gallagher, having already tempted away boss David Ross to become its new chief executive after a “transition period” with another firm.

Mark Mugge became chief operating officer this week, leaving Gallagher after nine years, having also been chief financial officer of International Brokerage, based in London, since 2011.

Janice Deakin is set to become a senior executive, having been UK commercial director at Arthur J Gallagher since July 2013.

Adrian Brown joins Towergate after a short spell with the US-based firm as executive chairman of underwriting and distribution. Prior to Arthur J Gallagher, he had a 25 year-career at multi-national insurance group RSA, the last six of which as chief executive of the UK and Western Europe.

Marc Vassanelli has become interim chief financial officer this week, having held a number of executive roles including as a regional chief financial officer at New York-based professional services giant Marsh & McLennan Companies.

John Kitson, who has more than 20 years’ experience in senior and board level roles at financial services companies, including 14 years with Aviva, has begun working alongside the team supporting marketing and communications.

The move sees chief operating officer Michael Rea leave the business, having joined the company in 2008.

Mr Egan said: “These appointments demonstrate further the determination of the group to build quickly on the firm financial foundations it now has in place.

“I am very grateful to Michael for all he has achieved over the seven years he has been with Towergate and wish him well for the future. No other management changes are contemplated.

“This news demonstrates Towergate’s ability to attract strong talented individuals excited by the potential of our market position and competitive strength, building on firm financial foundations.”

The announcements mark a new chapter at Towergate after months of turmoil.

The troubled company, which put up the for-sale sign in November after announcing losses of £112.7 million, now has £125 million in the bank and its £1 billion debt reduced by 60%.

This is after the business, which handles more than £3 billion of premiums a year, agreed two deals with separate groups of its creditors to restructure its finances, having raised doubts whether it could continue after years of debt-funded acquisitions of smaller brokers.

At first it appeared many lower level bondholders would be wiped out when secured creditors agreed to acquire the firm in exchange for cutting its debt to £375 million and injecting £75 million into its cashflow.

The rescue deal eradicated the interests of private equity backers Advent, who invested £200 million in 2011, and founder Peter Cullum, who established the firm in 1997 and became one of Kent’s richest men.

The restructure was short lived, as Towergate’s lower level bondholders agreed a new package with senior creditors just four days later.

The unsecured creditors, led by Highbridge, KKR and Sankaty Advisors, agreed to pay senior secured bondholders £250 million and inject £50 million in exchange for 80% of the firm.

The move was unanimously approved by the Towergate board.

“This further agreement brings the very difficult last few months to an excellent conclusion,” said chairman Alastair Lyons.

“The company has a strong balance sheet having substantially reduced its debt and has almost halved its interest bill.”

“The company has a strong balance sheet having substantially reduced its debt and has almost halved its interest bill...” - Chairman Alastair Lyons

The next step of Towergate’s recovery was the announcement the company had poached David Ross from American rivals Arthur J Gallagher to be its new chief executive.

He will join after an unspecified “transition period” at newly-formed portfolio company Sierra Investments Holdings, which will become the investment vehicle for Highbridge Principal Strategies – the group leading bondholders who own 80% of the company.

In the meantime, chief finance officer Scott Egan has been hired as interim chief executive, allowing Alastair Lyons to step back into a non-executive chairman role.

Highbridge partner Scot French said: “I am thrilled David is joining the team.

“We are excited by the prospect of working with the current Towergate team.

“The expertise, vision and the financial backing are now present to make a significant impact on the business.”

After much drama, the business at Eclipse Park appears to have emerged relatively unscathed. While it has made redundancies, it still employs more than 5,000 people and has 120 UK branches, including Sevenoaks and Whitstable.

---

Towergate's timeline of turmoil

October 2014: Chief executive Mark Hodges unexpectedly resigns. Alastair Lyons becomes executive chairman.

November 2014: Reveals losses of £112.7 million for nine months to September and reveals it is considering takeover offers.

December 2014: Sells air insurance arm Hayward Aviation to Jardine Lloyd Thomson for £27 million.

January 2015: Refuses to comment on reports £164 billion US private equity firm Apollo has made an approach. Bondholders reveal they have made a takeover bid to pay off more than £700 million of its debt.

February 2015: Two groups of creditors agree to inject £125 million into the company and wipe out 60% of its £1 billion debt, with senior unsecured creditors led by Highbridge, KKR and Sankaty Advisors taking ownership of 80% of the business. The shareholding of founder Peter Cullum is wiped out. Poaches Arthur J Gallagher boss David Ross to become chief executive after "transition period".

March 2015: Several other staff poached from Arthur J Gallagher start at firm after boardroom shakeup.