Highway Insurance is to cease writing its household, private hire, young driver and French private motor lines as part of a strategic review.
The insurer has pulled out of its private motor underwriting deal with French company Autofirst. The deal was worth £8m.
Highway general manager Stuart Davies said: "We have been decreasing our exposure in 2001 in this market and, because of this, a French insurer has been taking more of the account."
Davies said Highway would no longer provide cover for 17 and 18-year-old drivers and private hire for taxis, because it "could no longer write that business at economic levels". This book is worth £3m.
He said brokers had been advised of the changes and the company would be soon notifying them about the company's £4m household account.
Highway is now looking to expand its key UK books, including private motor, commercial vehicle and motorcycle.
But market sources say Highway could be suffering from a lack of capacity.
Last year, Highway was forced to pull out of motor insurance deals with Trade-wise underwriting agencies because its capacity ran out at the end of the year.
The past year has been turbulent for Highway and its parent, Lloyd's insurer Ockham Holdings.
In April, Highway's active under-writer of 15 years, Quin Lovis, took early retirement. Then, in August, Ockham announced plans to buy Lloyd's retail motor insurer Link, but the deal was abandoned earlier this month after Ockham failed to come to a price agreement with Link's parent, Kiln.
