Cox Insurance Holdings said the liquidation of Scottish underwriting agent Tribune Risk and Insurance Services could hit the group's pretax profits for the current financial year by up to £4.5m.
Cox said it has two relationships with Tribune through its premium finance subsidiary Can Do Finance.
It said the main relationship is with individual customers who were introduced to Can Do by Tribune. Cox said it also had a smaller direct relationship with the collapsed underwriting agent.
"Significant steps are being taken to mitigate the impact for Cox and for Tribune customers of Can Do," said Cox.
Provisional liquidator for Tribune, PricewaterhouseCoopers, estimated that 40,000 customers may have taken out invalid household insurance policies with Tribune.
Cox said Can Do had some 26,000 outstanding loans with Tribune customers, some of which may have been taken out to finance the purchase of Tribune policies.
