The Folgate Partnership has sold Folgate Insurance's commercial business to the Zenith Group for an undisclosed amount.

Zenith will use the business to set up a new provincial commercial subsidiary called Zenith Commercial.

The deal involves the transfer of managers, at least 40 staff, premises in St Albans, Birmingham and Maidstone and £10m worth of business on 1 July.

Zenith Commercial will develop provincial commercial business on behalf of Lloyd's Syndicate 2002, targeting premiums of £2,500 to £25,000.

The move by Zenith is a bid to break away from its motor focus.

Folgate commercial team head David Drew will become the managing director of Zenith Commercial, Mike Bridge the sales and operations director and Mick Husband the underwriting and claims manager.

"David and his management team represented a perfect strategic fit for us and will support our objective to diversify our business," Zenith Group chief executive Ken Acott said.

Drew said the split made sense, since The Folgate Partnership intended to buy brokers, while the commercial team had close relationships with their agent brokers.

He said that any commercial staff who did not want, or were unable to follow the move, would get jobs at The Folgate Partnership.

"Everyone's very pleased because they all have jobs after a period of uncertainty," he said.

"We'll operate a very selective agency panel," he said.

"We already have 200 brokers and are unlikely to get bigger than 250."