Peter Wood buys Esure for £185m

• The Esure deal includes the all-female Sheilas' Wheels car insurance brand. Picture: Complimentary

Wood, who founded Esure in 2000 in a joint venture with Halifax, already had a 30 per cent stake in the business.

The insurer, whose memorable "calm down, dear" ad campaign is fronted by film producer and restaurant critic Michael Winner, is a significant provider of home and car insurance and includes all-female drivers insurance brand Sheilas' Wheels.

Lloyds yesterday said Wood acquired the bank's stake for "slightly more" than its book value of 185m. The deal was backed by Toscafund Penta, a new venture capital vehicle managed by Edinburgh-based Penta Capital and backed by hedge fund Tosca. Both are chaired by former Royal Bank of Scotland chairman and chief executive Sir George Mathewson.

The two men worked together at RBS when Wood established the bank's tele-based insurance division, Direct Line in 1985.

Yesterday, Wood ruled out buying up RBS's insurance business which is also up for sale to meet European Union rules on state aid.

Lloyds – 43 per cent state-owned after it was rescued by the taxpayer at the height of the credit crisis – is streamlining its business after a merger with troubled rival HBOS in 2008 and a state aid ruling from EU regulators late last year.

Esure is its fifth disposal since it began off-loading non-core businesses six months ago, which includes the sale of its wealth management division to Rathbones and the transfer of its asset management division Insight to Bank of New York Mellon.

Most of the sales have been former businesses of HBOS. The sales have brought in 500m so far, although the bank admitted the sale of Esure was "not expected to be material".

The insurer, which offers home, motor, travel and pet insurance, uses the internet as a primary sales channel and had gross assets of 975.5m at the end of December 2008. Its call centre in Glasgow employs 800 people, along with operations in Manchester and its head office in Reigate, Surrey. The bank said all employees would transfer to Wood's new company, Esure Group Holdings.

Lloyds will retain the Lloyds TSB General Insurance and Halifax General Insurance operations. Last week, the former head of Lloyds-owned insurer Scottish Widows, Andy Briggs, was appointed managing director of the group's general insurance businesses.

Archie Kane, Lloyds' executive director for insurance, said: "This sale means we can focus our efforts on our core general insurance brands of Halifax and Lloyds TSB."

Woods said: "It means (Lloyds] can get on doing their thing, and we can get on doing ours. Lloyds and I never anticipated being joint venture partners.

"The deal I did with Halifax was fine for Halifax at the time … it didn't really work for Lloyds. It was a grown-up discussion and we have come to an amicable parting of the ways," he added.

Woods has a personal fortune estimated to be worth 120m.