Halifax General Insurance Services (HGIS) has denied market speculation that it is going to start underwriting its own personal lines policies from 2005.
A spokeswoman confirmed that HGIS renewed its contract with Royal & SunAlliance (R&SA) at the end of last year until 2005 and said the companies enjoyed a "good relationship".
She said: "It is not true to suggest the decision to terminate the contract will be taken.We may well renew our contract with R&SA again or with another insurer, we don't know, 2005 is along way off."
The account with R&SA represents over 40% of HGIS's existing household book, which is valued at £320m gross written premium.
The spokeswoman also denied suggestions that HGIS planned to acquire a loss adjusting operation. R&SA currently offers a loss adjusting service to HGIS's household account as part of the outsourcing deal.