AXA has withdrawn from the race for AA Insurance to switch its focus on targeting UK broker consolidators.
It is understood AXA was at one stage in the beauty parade for both motor specialist brokers Carole Nash and Footman James, while running its slide rule over AA Insurance.
But the French insurer has decided to refocus its attention on the UK SME market after snatching Stuart Alexander and Layton Blackham two weeks ago.
A senior broking source said: "AXA were heavily involved in the talks with the AA but decided to pull out. It decided to withdraw from Carole Nash and Footman James once the price became too high."
French rival Groupama paid over £80m for Carole Nash in December and Footman James is expected to be sold by its owner, venture capitalist Alchemy Partners, for above £60m in the auction it began in December.
AXA chief executive Peter Hubbard said last week that the insurer wanted to topple Norwich Union as the largest SME insurer in the UK.
According to sources, consolidators such as Oval, Jelf Group, and major regional brokers such as Smart & Cook and The Broker Network would be potential targets for AXA in the future.
But as one analyst noted: "To really dent NU's presence in the SME market, the real objective is to either acquire or neutralise Towergate."