Capita McLarens has sustained another blow with its exclusion from Lloyds TSB Insurance's loss adjusting panel.

The panel, announced this week, includes Cunningham Lindsey and GAB Robins. Crawford & Co will continue to provide its subsidence adjusting service.

Out of the five loss adjusters, Capita McLarens and The Davis Group failed to make the panel. Last year Churchill, Liverpool Victoria and NFU Mutual chose not to retain Capita McLarens' loss adjusting services.

A Capita spokeswoman said: " We are disappointed that our partnership of delivering loss adjusting expertise is not being continued."

A leading industry source said he felt Capita McLarens needed to work harder on managing its business relations.

"It is misreading business, but has also had to deal with lots of change. Many directors have left and this creates discontinuity," he said.

Late last year, the loss adjuster lost its liability director Chris Hall.

Its managing director Mark Smith resigned in September 2002.

Capita Insurance Services managing director Bill Dye said Capita McLarens was to be restructured this year and its technical capability improved.

"We are also developing technology to enable us to handle larger volume accounts," said Dye.

In response to the panel announcement, Lloyds TSB Insurance's customer services director Simon Furnell said it was looking for "two strong players with an equal customer focus to ourselves".

He said with two on the panel, there would be an element of competition in maintaining standards.

"We had a good response to the tender process and all five were strong contenders," he said.

"We will work closely with panel members to develop a strong partnership."