Edinburgh-based brokers Castle Cairn and Kingston Hurn are to merge, to create a company with critical mass and a broader client base.
The company, which will have combined non-London market business of over £5m per year, will retain the name Castle Cairn and will operate from Castle Cairn's offices.
There have been no staff redundancies.
Kingston Hurn founder Clive Hurn is to become a director of Castle Cairn and a shareholder.
Hurn said a major advantage of the alliance was Castle Cairn's membership of The Broker Network, an umbrella organisation for insurance intermediaries that provides them with necessary facilities and services.
"Brokers are facing increasing challenges in an ever hardening market but being part of (The Broker Network) gives us access to substantially improved rates and terms with insurers which will ultimately benefit our clients," he said.
Castle Cairn managing director Alan Grant said that pooling the companies' resources would bring significant benefits for staff, clients and insurers alike.
"We had some very positive reasons for getting together. We really did feel we shared a lot of values," he said.
