The insurer's decision to enter run-off helped improve its profitability

MMA Holdings UK injected an additional £11.4m into Gateway Insurance Company as it struggled with difficult trading conditions in private motor.

The money was pumped into the Gibraltar-registered motor and home insurer in 2009, the same year the business was eventually put into run-off.

MMA Holdings UK, the holding company for the UK operations of French insurer Mutuelles du Mans Assurances, declined to comment.

Gateway ceased writing new business during 2009, but is still inviting renewals for both private car and home business.

As a result of the run-off, Gateway’s net written premium fell 63% to £13.7m in 2009 from £37.1m in 2008, accounts reveal. The book is 80% motor and the rest household.

However, the decision to enter run-off has since improved the firm’s profitability: its total loss after tax narrowed to £2.6m in 2009 from £19.2m in 2008.

Meanwhile, management at Provident Insurance are supportive of MMA’s bid for its motor insurer, currently up for sale, Insurance Times understands.

The board hopes it will be given a licence to continue running Provident as a standalone business should the bid by MMA succeed.

Insurance Times last week revealed that MMA is the favourite to gain Provident from its US owner GMAC. MMA has agreed a three-month period of exclusivity and is in discussions over a £70m deal. However, GMAC and corporate adviser Goldman Sachs will ultimately decide the company’s fate.

GMAC is thought to be keen to dispose of its asset by the end of the year.