Inter Group is to run the claims and administration accounts for two of Virgin Money's recently-launched insurance products.
The company will run the service for Virgin's pet and travel insurance account, with fellow Royal Bank of Scotland Insurance subsidiary UKI to provide the underwriting.
Speaking at the launch of Virgin's insurance offering, Virgin Money managing director Mark Hodgkinson said: "We have a very strong brand and so can compete in the competitive market.
"The leading retail brands have taken a substantial slice of the direct general insurance market, but we believe we can be as successful as Tesco."
He said aggressive pricing and Virgin's strong brand would see it take a substantial share of the direct market.
Analysts are predicting the brand will be particularly successful through cross-selling to associated Virgin brands such as Virgin Atlantic.
A source said: "There are plenty of cross-selling opportunities for the brand through its financial services arm and other businesses such as the company's travel operation."
