Insurers have decided to shelve plans for e-commerce service I2i-link, which cost £28m to fund.
The initiative, backed by software house Misys and six insurers - Royal & SunAlliance (R&SA), AXA, Allianz Cornhill, Groupama, Zurich and Norwich Union - has been plagued by problems since it was first planned last October.
I2i-link was intended to allow new products and updated rate information to be communicated between insurers and brokers.
But I2i-link spokesman Philip Nunn said the decision to pull the plug on the portal was made after an industry-wide cost-benefit analysis.
He said: "As the details emerged, the scale, cost and complexity of the task to align insurer and broker technology has become apparent.
"The time and resource needed to implement the agreed vision means insurers cannot justify the investment required in terms of the benefits likely to emerge.
"As a consequence, the project is not viable."
Ivan Martin, chief executive of Misys, which held a 50% stake in I2i-link, said he would like to work with the insurance industry to seek an alternative.
"While I fully understand the need for insurers to be able to justify the returns on such investments, particularly in the current environment,
I remain convinced the vision that was set out for the industry is still valid," he said.
I2i-link had met with opposition from software houses, which felt alienated by the prominent role of Misys in the deal.
Several companies already have technology in place to provide brokers with updated insurer quotations. Many asked why they should modify their portals to fit in with I2i-link if there was nothing in it for them.
Chair of the insurer consortium Steve Broughton of R&SA said: "It is unfortunate for Misys and for all of us that we have reached this conclusion, but we are confident our decision is in the best interests of insurers, brokers and software houses alike."
I2i-link was plagued by rumours of underfunding and lack of interest from the insurance industry and software houses.
Misys originally approached 16 insurers to invest in I2i-link, but only attracted the "big six". The launch date for the initiative remained vague, and in May, I2i-link failed to show at the British Insurance Brokers' Association (Biba) conference.
