Capita has lost its family legal protection account with Norwich Union Direct following recent restructuring by the insurer.
The personal legal expenses account, which is believed to represent 40% of Capita's business in that area, will now be handled in-house, according to NU.
A spokesman for NU said: "It has now gone into RAC Legal Services following the acquisition of RAC in March 2005. Obviously we acquired a fairly sizeable legal services operation from RAC so it made sense to bring it in house."
Capita, which continues to provide services such as medical, healthcare and travel for NU, was unable to comment as it is currently under contract negotiations with the insurer.
An industry source said the loss of its personal legal expenses account would have "limited impact" on Capita as it has a "much bigger contract" with NU.
