Wood founded esure - which offers home, motor, travel and pet insurance - in 2000 as a joint venture with Halifax after handing over control of DirectLine to the Royal Bank of Scotland.

Lloyds - 43%-owned by the tax payer - acquired the insurer last year when it took over failing parent Hbos.

With Lloyds looking to dispose of assets, Wood is now leading a management buyout vehicle called esure Group Holdings, backed by Tosca Penta Investments, set up for the deal by Toscafund and managed by Penta Capital.

The company's staff will continue to be employed by esure Services, says Lloyds.

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

Separately, Lloyds unit Bank of Scotland is closing its Irish retail operations, costing 750 jobs.

A phased closure of Bank of Scotland (Ireland) retail operations will begin in May and end in July, covering 44 branches, a customer service centre in Dundalk and direct support functions. Retail products are no longer being offered and customers will be contacted this month.