I know a number of insurance brokers who sell Car Insurance.
All of whom have, in recent times, had their 'book' of Car Insurance business reduce - either through loss of renewals (in favour of larger companies with cheaper policies) or an intentional act on their part to branch out in to other products and reduce their Car Insurance 'book' because the profit margins are just not sustainable for a small company.
The exception, is arguably the more niche markets such as Kit Car or Classic Car etc, but even then it's a highly competitive marketplace.
However, a few years back, myself and one of the Car Insurance brokers I know, contemplated selling Car Insurance online - he was the very well established high-street broker and I was the "web" guy... We had an excellent product and subject to strict criteria we were very competitive and (would have) enjoyed excellent margins... Then as part of our Marketing strategy research it was calculated that in order to compete with the big boys, on Google Adwords (etc) costs alone we'd need a budget of circa £16K PER DAY!
That was the end of that then!
If you're not already established in the Car Insurance business, or have a huge headstart in terms of marketing opportunities and/or a terribly unique and niche product I'm afraid my advice would be to change your focus on to something else other than Car Insurance.
However, to answer your question, I started my insurance (not car) business with just £2k in the bank, though it was almost 8 years ago now, but I already had the workspace, didn't require any staff, or phone lines (immediately) because it was an online business - I handled all the sales enquiries, built and maintained the website and from Jan 2005 dealt with all the regulatory stuff. At its peak, I took it to writing circa £250k of policies per year with a profit margin of between 30% and 40%..
It shows that big start-up capital is not always necessary, but equally I didn't have to 'buy in' many skill-sets other than those of my accountant.
It'd be different now because FSA Regulation would be required from the outset (it wasn't 8 years ago) so you'll attract cost there in terms of the application fee (£500?) Followed by their annual fee - this varies but for me was circa £2500pa. You'll also need Professional Indemnity Insurance - again this varies, but for me my last policy cost £1300 for the year.
Your own start-up costs will depend largely on your product range, your marketing potential, your sales method, your own skill-set (or lack of), your requirement for premises (actual office / home office / virtual office), will you need staff or will you do it all yourself - or can you employ a call-centre? Will you fulfill (issue documentation) your policies yourself or will you sub-contract? If you sub-contract, will you need to buy bulk upfront? If you don't sub-contract, what software/hardware will you need? Have you already found an underwriter (or underwriters) and Claim Administrators - if not you'll have to go visit some and you'll need a good sales projection to get decent rates from them. How will you report policy sales, updates and cancellations to the underwriters and administrators - will you have to buy software in or can you write your own software/scripts? Also, don't forget that as an insurance broker, the products you sell won't attract VAT therefore you won't be able to claim back the VAT element of any purchases you make.
And that's just off the top of my head!
Also you should have a look at the FSA's guidance on "Capital Resource Requirements" - in simple terms it specifies how much money you need to have set-aside within your business. It's expressed as a percentage of Regulated Income - if I remember correctly it's something like 2.5% of income or £5k (whichever is the higher.
You can bypass the FSA Regulation costs by having another company appoint you as a representative of theirs, but they're likely to want something in return by way of a monthly charge or minimum business levels or both.
