Motor insurer Ockham Holdings has begun to pull out of Lloyd's with the launch of Highway – its FSA-regulated subsidiary.
Ockham, which mainly distributes private and commercial motor insurance, blamed Lloyd's costs for the move.
Finance director Andrew Gibson said: "After paying Lloyd's registration and Central Fund levies, plus Lloyd's broking costs, regulatory fees associated with the market can add up to four per cent of our £240 million premium income."
Highway will instead be regulated by the Financial Services Authority at reduced cost.
Lord Poole, Ockham group chief executive, said he believed the company could achieve greater returns from a fully reserved insurance company than a Lloyd's syndicate.
Lord Poole said: "Highway extends our room for manoeuvre. It will make our business easier to analyse, as its share of our results will be presented in the format commonly used by UK insurance companies."
The company will initially transfer £70m of its £240m underwriting capacity to Highway, which officially began trading on January 1.
It eventually aims to transfer all of its £110m corporate underwriting capacity in Syndicate 2037 with the possibility of absorbing further capacity from its £60m Syndicate 37.
Gibson assured brokers that the process, which is expected to take up to three years, will not noticeably change the way Ockham and Highway operate.
Liz Crouchman, Ockham assistant director, did not believe the withdrawal would spark a mass exodus.
