Insurance giant Towergate suffered a 20.6% decline in underlying profitability in the first three months of the year as bosses hailed “solid progress”.

The broker and underwriter, which is headquartered in Maidstone, watched adjusted earnings before interest, taxes and other charges fall to £13.6 million, compared to £17.2 million in the same period last year.

Income fell 6.9% to £76.8 million but it reduced staff expenses by £500,000 to £46.7 million and cut operating expenses by £1.6 million to £16.4 million.

Bosses said there had been strong underlying income and cost control in its insurance broking division, which has sites in Sevenoaks and Faversham, the latter under the Capital and County brand.

Underwriting income continued to be affected by a low interest rates and the competitive landscape, particularly on new business.

Bosses said the firm is still recovering from its financial restructure, which saw it brought under new ownership last year as it wrestled with debts of £1 billion.

Its actual earnings before interest taxes and other charges were £2.8 million, just over half what it was compared to the same time last year.

Chief executive David Ross said: “Our underlying performance is ahead of expectations with these results impacted by well-known legacy issues.

“I am pleased that the encouraging progress across the business that we reported at the full year has continued into the first quarter of 2016.

“Delivery of our cost saving initiatives is ahead of schedule, and to date we have already completed over half of the new £30 million target identified.

“We are making solid progress towards fixing the infrastructure and legacy issues of our business whilst ensuring we rebuild and grow a Towergate of which we can all be proud. There’s plenty more to do and our focus remains on making sustainable improvements over time.

“I’ve had the privilege of travelling around the UK to meet 2,500 of our people across our underwriting, insurance broking and Paymentshield offices. Their dedication to doing what’s best for their customers remains the organisation’s most valuable asset.”