Atrium Underwriting has pulled out of the UK motor market despite making "excellent" profits from the sector in 2005.
The Lloyd's managing agent has withdrawn £9.6m of capacity from Cox's specialist motor syndicate.
Instead, it has increased its participation in the MAP syndicate, providing £34.1m of capacity to write reinsurance business in 2006, compared to £15.9m in 2005.
Atrium chief executive Steve Cook said: "We felt the [UK motor] sector was under pressure and that it didn't offer the same opportunities as in 2005.
"[Increasing exposure in the reinsurance business] is an opportunistic move to take advantage of a hard market."
Meanwhile, Atrium has failed to reproduce the record profits of 2004 after being hit with US hurricane losses of £26m last year.
The company reported pre-tax profits of £10m for its two managed syndicates and its participation in five others - Cox, Wellington, Beazley, Omega, and MAP. This was down from £32m in 2004.
Its combined ratio also deteriorated, rising from 82% in 2004 to 108% last year, with 22% of that attributable to the 2005 hurricanes.
Cook said the broad spread of business helped limit the effect of the damaging hurricanes. "With much improved trading conditions for catastrophe exposed business, and an attractive capital ratio, we continue to provide shareholders with the potential for excellent returns."