Zurich is shutting its two in-house repair centres making 85 staff redundant.

The insurer said the closures were due to a reduction in repair volumes and admitted both operations were trading at a loss.

Roger Day, director of Zurich Financial Services, said: “Changes in our business, principally in risk selection, has meant a reduced volume of repair work in the area of the two centres.”

Derek McMullan, bodyshop manager, added: “These shops are large – they need a lot of work and being a wholly owned shop they are not viable.”

The closures will clash with the expected date of Zurich's axing of a third of its approved repairer network.

Bob Hood, director of the Retail Motor Industry Federation, believed this was due to over-estimation of the amount of work available to repairers.

Meanwhile Solus Accident Repair Centre, Norwich Union's leading body repair partner, has won the Motor Trader “Bodyshop of the Year” title. The centre repairs around 160 cars each week and its success has led to the opening of a further site in Luton.