Groupama is to double its capacity for SME business next year.
The insurer will increase its SME business to around £40m in 2004, using capacity freed up by its withdrawal from a deal to co-insure Saga's motor book from Gibraltar.
Though sources at both companies refused to confirm the change in direction, Groupama is believed to have backed out of a deal to share risk with Saga in its new underwriting arm.
Groupama underwrites Saga's £100m book, but Saga is expected to start underwriting its own policies from Gibraltar in January 2004.
Groupama can now direct millions of pounds to new business in the SME sector and away from the predominantly motor-based book it now carries.
Former AXA northern regional manager Amanda Blanc is expected to join Groupama in December.
She will be responsible for generating the new business.
The move could be seen as the latest chapter in a volatile relationship with insurers.
The Saga motor book was underwritten by AXA before being taken over by Groupama.
But it is understood that in both cases the deal was heavily weighted in favour of the intermediary, offering little or no margin for either AXA or Groupama.
Saga refused to comment on whether it was in negotiation with other insurers to help underwrite its motor policies or whether it would go it alone.
