Fortis has entered into a landmark three-year deal with Pharmacy Mutual Insurance (PMI), reinsuring the whole of the mutual's book of business.

This is the first time Fortis has acted as a sole reinsurer.

Chief executive Barry Smith said, although reinsurance was not the company's main business, it wanted to offer a range of "customer-driven solutions".

Future reinsurance deals of this kind had not been ruled out, he said.

The deal, in which Fortis will act as claims administrator, is expected to provide the company with an initial income of approximately £9m annually with a strong expectation of further growth.

PMI, which provides commercial, home and motor insurance to community pharmacists, has a gross written premium of about £10m and is looking for growth of10% in the first year.

Heath Lambert Group will be undertaking all policy administration and sales.