Italian insurer Assitalia is poised to quit the UK insurance market, it emerged this week.
The news has disappointed many of its brokers who were still waiting for written confirmation at the time of going to press.
Many had delegated authority agreements with Assitalia under which they could write a certain amount of business themselves.
The decision marks a u-turn for the insurer which last year opened a new office in Birmingham with plans to double the size of its income from the provincial broker channel.
But an analyst said the move was expected because of the insurer's poor results.
"It is not a surprising move because the profitability was never really good," said Fitch IBCA analyst Anne-Sophie Desprat.
She added: "If the news is true, it is a pity. They've put a lot of effort into building it up."
But another reason for the withdrawal is Generali's acquisition of Assitalia's parent company Istituto Nazionale delle Assicurazioni (INA) last year.
Generali ceased underwriting UK domestic insurance in June last year and transferred the bulk of its £35m UK general insurance portfolio to Japanese insurer Chiyoda.
Some of its household policy renewals were switched to Assitalia.
The insurer was unwilling to comment on the withdrawal but a spokesman said a statement will be issued in the future.
Assitalia has held a licence to trade general insurance in the UK since 1981 and employs 32 staff.
The Italian firm writes personal lines business including personal accident, travel and household, as well as small commercial lines such as all risks, property, general liability and licensed trade.
The news has taken the market by surprise. Few brokers were aware of Assitalia's withdrawal when contacted by Insurance Times, including the trade body Biba which has a travel scheme with the insurer.
Linda Brooks small business section supervisor for FM Green said: "We found out last night. It's a nuisance as far as we are concerned because it is a facility that we have not got otherwise."
FM Green has delegated authority to write small commercial lines business across the board with Assitalia including shops, offices, and pubs as well as "one or two larger schemes".
Another broker, who did not wish to be named, said: "We were given two days' notice. We still haven't had the news officially. No one has had it in writing. We were due to launch a new product last week and this news left us in a panic."
A spokesman for the insurer said: "I do not have any comment in this regard but a press release will be issued in the future."