Insurance giant Admiral Group has confirmed two joint ventures with law firms.

The UK motor insurance giant has joined with national firm Lyons Davidson and Cardiff firm Cordner Lewis to create Admiral Law and BDE Law.

The insurer confirmed in a statement to the London Stock Exchange that both ventures were today granted alternative business structure licences by the Solicitors Regulation Authority. These licences will be effective from 1 May 2013.

The statement said: ‘Admiral is committed to providing its customers with the best possible service. Bringing the provision of legal services in-house will allow Admiral to administer a claim throughout the process and offer customers a materially better quality of service.’

The statement made it clear that the new and proposed reforms related to the handling of RTA claims meant that the ABS businesses are not expected to make a ‘material contribution’ to Admiral’s profits in the foreseeable future.

The company added that it welcomed all action taken to ‘curb the compensation culture that currently exists within the UK motor insurance market’.

The partnership is the most significant to date in a series of tie-ups between insurers and law firms following the ban on PI referral fees, which came in to force on 1 April 2013.

Admiral stood to lose a significant income stream through the ban, having earned £18.6m from selling customers’ details to PI lawyers in 2012. Admiral stresses however that the money is earned from referring customers only with their permission.

The deal links it with with two law practices numbering more than 1,200 staff at offices across England, Wales and Scotland.

A spokesman for the SRA 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.

Lyons Davidson has been the subject of speculation since it obtained an ABS licence last November.

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

Cordner Lewis describes itself as a niche practice formed in 2001 by two friends, Michael Cordner and Julian Lewis. It specialises in litigation and dispute resolution and acts for both claimants and defendants.

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.