The agency has been given three months' notice on the business, which is being consolidated into the Norwich-based agency Fox Murphy.
Fox Murphy is retained by the financial services group Aviva, which bought the RAC in March. The consolidation will see Fox Murphy continuing to handle direct marketing for the Norwich Union brand, while adding the RAC business to its list of clients.
Partners Andrews Aldridge won the RAC business in August last year with a brief to build customer relationships through press, direct mail, online and direct-response TV advertising.
The agency has recently developed DM activity as part of an integrated campaign aimed at boosting membership to the service. Outdoor and press work was created by Abbott Mead Vickers BBDO, with partnership and promotional marketing through Iris.
Ian Dobson, the RAC's head of brand and marketing communications, said: "This decision is in no way a reflection of the quality of service provided by Partners Andrews Aldridge, which has been consistently excellent, but is one of a number of areas of consolidation. We wish the agency well and thank them for all their great work."
Phil Andrews, the managing partner at Partners Andrews Aldridge, said: "Less than a year after we won the business after a hotly fought pitch, it's very disappointing. But it's one of those things that sometimes happens following a merger or acquisition."
The consolidation of the direct business into Fox Murphy follows the RAC's decision to move its advertising account into Abbott Mead Vickers BBDO, which also handles Norwich Union's business, in June. It was previously held by The Windmill Partnership, which created the "helping hand" advertising idea.
Aviva is aiming to boost the RAC's individual roadside-assistance membership from 2.2m to 3.3m to help close the gap on its main rival, the AA, which has 15m members.
The RAC is also under pressure from analysts to improve its performance in financial services, which accounts for 14% of its profits, compared with 23% at the AA. The company will aim to achieve this by tapping into Norwich Union's database of customers and by cross-selling its products to new and existing roadside-assistance customers.
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