Tradex Underwriting Agencies has pulled out of an agreement to support underwriter Tradewise, accusing it of underpricing policies and ignoring the expiry date of the deal.
In November 2000, Tradex agreed to help out Tradewise after its insurer Highway ceased accepting new business from its broker clients. Tradex claims the agreement, which was agreed verbally, ran until the end of June. But a Tradewise spokesman said: “It is not right that the agreement was until the end of June, because we were not asked to cease trading until July 13.”
It is understood the agreement was to cover the period until Tradewise was granted a licence to underwrite its own business in Northern Ireland. It is still awaiting this.
A Tradex spokesman said: “We have suspended our deal with Tradewise, as it was underpricing policies, particularly in Northern Ireland. Its processing and information gathering skills were not up to our standards.”
A spokesman for Tradewise replied: “It was just a difference of opinion about the Northern Ireland business, which we were writing at a rate Tradex thought was too cheap”.
A letter has been sent out to Tradex brokers to clear up market rumours that the company has been having troubles with capacity. It said: “There has been an element of confusion due to the similarity in our names, Tradex and Tradewise. As regards our own capacity, we have plenty to write all the motor trade business, self-drive hire, taxi and unusual business you care to offer us.”
The company is awaiting the results of an audit it conducted into the whole of the Tradewise book placed with Tradex facilities.
A Tradewise spokesman said the firm was currently looking for another carrier for its £12.5m motor book. “We are in talks with several UK insurers with regards to the business being carried forward,” he said.
Highway ceased accepting new business because of a lack of capacity, a development which infuriated brokers who were left without a significant market for much of their Highway business.
Tradewise placed all of its motor trade business through Highway, but was one of those “switched off” by the insurer. The rest of Tradewise's book of business, including commercial vehicle, material damage, goods in transit, household and liability has been placed through “a number of Lloyd's syndicates”.