Motor trade specialist could fetch over £70m
Motor trade insurer Tradex will come up for sale this year with a £70m price tag, under cash raising plans being put together by the company's board, Insurance Times has learned.
The motor trade specialist said this week it was looking to raise £20m.
This would be used to fund the next stage of its development.
But market sources said a trade sale was also being considered.
Tradex, which is expected to make a profit of over £7m in 2006, would be an attractive acquisition for insurers such as Norwich Union and Allianz Cornhill given its large motor trade business.
Tony Lumsden-Cook, the company's new chairman, confirmed that Tradex was looking to raise money but would not comment directly on a possible sale. "We are looking for investment opportunities," he said.
Insurance Times has also learned that Tradex is planning to form a new insurance company to underwrite high net worth business.
Lumsden-Cook said the company was looking to expand its portfolio of products away from its traditional motor trade lines, with a focus on the high net worth sector.
The spin-off insurance company, called Private Clients Underwriting, will be set up within the next 12 months once Tradex's high net worth business has become more developed.
The company recently launched a high net worth fleet product for families with a number of vehicles.
This is expected to write up to £10m of business in 2007.
Further high net worth products will follow.
Lumsden-Cook, a former managing director of high net worth specialist Oak Underwriting, will spearhead this development.
"We will expand the product range and begin an advertising campaign to develop the brand," he said.
A developing high net worth business could also add to Tradex's value.
Tradex reported a gross written premium of £58.8m and a pre-tax profit of £5.2m in 2005, according to the latest accounts filed with Companies House.
