An insurer is tipped to buy premium finance provider Premium Credit (PC) in a deal that is thought to be worth up to £300m.

Sources said an announcement was expected imminently. Names associated with the deal include AIG, AXA and Norwich Union.

One source said: "AIG has been in the market before so I'm not too surprised, although I would have thought Norwich Union or AXA may have been more likely. It's a lot of money to spend and the insurer will have to put capital in on top of that."

Close Premium Finance (CPF), which had previously shown interest in the premium finance company, is believed to have backed away because it was deemed too expensive.

The potential deal between CPF and PC previously sparked concern among some of the broking community, who feared it could "end in a monopoly".

PC claims to dominate the UK premium finance industry with a 60% share of the market. The business was acquired by MBNA in 2004 for around £180m. Bank of America bought MBNA in 2005.

AIG, AXA, NU and MBNA declined to comment.