Bodyshop group Nationwide Accident Repair Services has reported its work for insurance giant Aviva will be slashed by two thirds this year following a re-tendering process.

It expects a £10m revenue shortfall this financial year as a result of the process, which saw Aviva award repair volumes on terms deemed unattractive by Nationwide.

From July the bodyshop group will no longer undertake Aviva work in certain regions, however it said the insurer remains an important and valued customer still supporting around £5m of revenue.

Nationwide added in a statement: “Capacity across our branch network will be unaffected by this decision and there are no plans to close sites. The impact of the reduced volume is largely mitigated by the scalability of the group's operating costs and flexible working practices.”

The company, headed by chief executive Michael Wilmshurst, reported its mobile repair and glass replacement business continues to grow and it has “an encouraging pipeline” of new fleet and insurance opportunities.

“With the continuing, and expected, downward trend in motor insurance claims frequency, we remain focused on securing new business in the retail and fleet markets, as well as in the insurance-funded market, and on ensuring that our cost base is aligned with demand,” the company added.