Gresham Insurance, which is 90% owned by Legal & General Insurance and 10% owned by Barclays unit Woolwich, is to provide buildings and contents insurance to Barclays customers from January.
Legal & General said this will effectively increase the size of its general insurance business by half.
This initiative represents an extension to the strategic alliance, announced in January last year between Barclays and Legal & General, that gives Legal & General access to 13m more customers.
The companies say the alliance has been a success, with Barclays selling Legal & General's savings and protection products to its customer base.
Legal & General group director Kate Avery commented: "We are delighted that Barclays has decided to extend further our successful alliance with them. Legal & General already provides Barclays with investments, pension and protection products. This addition of household general insurance products is, I believe, an important vote of confidence in Legal & General's business and strategy."
Barclays and Woolwich each have around 300,000 household general insurance customers in the UK.
