Tradex is to continue its expansion into the high net worth sector following the expiry of legal restrictions on its chairman.
The motor trade specialist is gearing up to target the high net worth home market after a restrictive covenant on the chairman, Tony Lumsden-Cook, expired at the end of July.
Tradex could make an acquisition as part of the drive.
The covenant prevented Lumsden-Cook from competing in the high net worth home sector after stepping down as chairman of Somerville Underwriting, which owns high net worth specialist Oak, last year.
Lumsden-Cook said Tradex could buy a high net worth underwriting agency or broker in order to obtain an established book of business.
Another option would be to establish a new insurance company.
“If we make an acquisition it will be within six months,” he said.
Tradex will now look to develop a combined high net worth home and motor product.
The move follows the entry of Tradex into the high net worth motor sector, with the launch of a product for owners of multiple vehicles at the end of 2006.
Lumsden-Cook said: “High net worth motor hasn’t taken off [in the market].
“It is difficult to underwrite. Our competitors use a standard motor policy, but we want to understand the risk.”
Insurance Times reported (News, 1 March) that Tradex was looking to raise £20m to fund its expansion plans, which could lead to the company being sold.
Lumsden-Cook would not comment in depth on the progress of the capital raising, but said: “We have had a lot of interest in various forms – such as investment or sale. We are comfortable with our financial position going forward.”
Tradex made a pre-tax profit of £7m in 2006, up from £5.2m
in 2005. Gross written premium was down slightly in the year, falling to £52.7m from £58.8m in 2005.
The company attributed the decline in premium to the withdrawal from some taxi business in 2005, where rates had fallen.