Esure moved into profit for the first time in the three years since its launch with a near £1m profit, according to HBOS's interim results.
The joint venture with Peter Wood recorded a 29% increase in gross written premiums to £129m for the first six months of 2004.
Esure chairman Peter Wood said: "We are pleased to have moved into profit, particularly given the highly competitive car insurance market conditions we have seen in 2004 so far.
"Esure's awareness has grown rapidly since launch, making the brand a household name, and we have managed to deliver good growth from this awareness during the last year."
Total number of esure policies in force now stands at 850,000.