Norwich Union (NU) has taken over from Royal & SunAlliance (R&SA) as underwriter of the Post Office's home insurance business.
An R&SA statement said that the insurer had ceased underwriting the Post Office's home insurance book on 31 December 2003.
"The exit is in line with R&SA's strategy to focus on mutually profitable business with its affinity partners."
A Post Office spokeswoman said the scheme with R&SA had "not performed as expected".
The source said the Post Office had embarked on a series of pilots with NU in which post offices would be selling home insurance at 200 branches in the Bristol, Newcastle, Liverpool and Manchester areas.
R&SA began underwriting the Post Office's home insurance business in 2001.
