Capita aims to exploit its links to government and privatised institutions to distribute motor, household and travel insurance.
Under newly-appointed non-executive chairman Sandy Dunn, Capita will look to carve a niche in personal lines by forming affinity partnerships with local councils and privatised bodies like the DVLA.
Dunn, who will continue as chief executive of BDML, will also oversee Capita's transformation into a major player in the sector through a combination of organic growth and acquisition.
Dunn said: "Insurance companies and banks are well down the list in terms of trust. Retailers and institutions offer a better avenue because they have a better reputation."
Industry experts have suggested that poaching the Post Office account from Budget's affinity arm Junction will be a priority for Capita.
Capita's insurance division is best known for providing outsourced claims handling and processing services to major insurers and brokers.
Dunn said: "Capita is a sleeping giant. The company is punching below its weight and I intend to change that."