Insurance giant Admiral is poised this week to move into legal services through a joint venture with national firm Lyons Davidson.

The partnership – set to be announced as the Gazette went to press – is the most significant of a spate of tie-ups between insurers and law firms in the wake of the ban on PI referral fees, which came in to force on 1 April.

Admiral stood to lose a significant income stream through the ban, having earned £18.6m from selling customers’ details to PI lawyers in 2012.

Lyons Davidson (pictured) has been the subject of speculation since it obtained an alternative business structure licence last November.

At the time, managing director Mark Savill said the firm would look at future links with insurers. However, in January the firm denied reports that it was being taken over by Admiral.

The partnership deal was sealed just days after Ageas UK, the country’s fourth biggest motor insurer, announced a five-year tie-up with Cardiff firm NewLaw to provide services for customers making non-fault personal injury RTA claims.

Andy Watson, chief executive of Ageas UK, said the partnership would provide customers with a ‘one-stop, high-quality journey, with fewer hand-offs to third-party suppliers’.

Ageas has 8 million policyholders in the UK and has linked up with a firm employing around 250 people. The ventures will raise long-standing questions about the workability of the referral fee ban.

A spokesman for the Solicitors Regulation Authority said that to avoid breaching the rules insurers must create legal service providers carrying out proper activities for consumers as a single entity. Referral would not break the rules if information remains within the organisation.

The spokesman added there have been instances of firms being told their business model would contravene the ban and they would have to amend their ABS application.