Ace Australia has quit the affinity market, blaming a lack of profitability.

In a statement signed by Australia & New Zealand CEO Damien Sullivan and circulated to brokers last week, Ace says it can’t produce a return on investment despite significant efforts to grow the affinity business.

“We concluded that the commitment of any further resources and investment in our affinity business clearly presents an unacceptable capital risk,” he said. “Hence, we have taken the necessary decision to exit the affinity business.”

The business will go into run-off and Ace will not renew any accounts after October 31.

Mr Sullivan told insuranceNEWS.com.au the company has found it “too hard to differentiate ourselves”.

He declined to explain why the business was unprofitable or the quantity of affinity business handled by Ace.

He says the affinity business has been core to the Ace Australia strategy since 2004, when the company made a “significant investment” in people and infrastructure to develop affinity offerings in retail, franchise, strata, landlords and small business segments.

“Although we are naturally disappointed with this decision to depart from the affinity space in Australia, in no way will it detract from Ace’s unwavering commitment to meet the risk management needs of our diverse clients and brokers,” Mr Sullivan said.