The Folgate Partnership has sold Folgate Insurance's commercial business to the Zenith Group for an undisclosed amount.
Zenith will use the business to set up a new provincial commercial subsidiary called Zenith Commercial.
The deal involves the transfer of managers, at least 40 staff, premises in Birmingham, Maidstone and St Albans and £10m worth of business on 1 July.
Zenith Commercial will develop provincial commercial business on behalf of Lloyd's Syndicate 2002, in a bid to break away from Zenith's motor focus.
Folgate's David Drew will become the managing director of Zenith Commercial, Mike Bridge the sales and operations director and Mick Husband the underwriting and claims manager.
Drew said the split made sense, since The Folgate Partnership intended to buy brokers, while the commercial staff had close relationships to their agent brokers.
Drew said that any commercial staff that did not want or were unable to follow would get jobs at The Folgate Partnership.
He said the new business would target premiums of £2,500 to £25,000.
"We'll operate a very selective agency panel," he said.
"We already had 200 brokers and are unlikely to get bigger than 250."
