Geico Corp. said yesterday it is leaving the homeowners insurance business, which it said is too small to manage efficiently, and will concentrate on selling private automobile insurance.

Geico will hand off its 438,000 homeowners policyholders -- 147,000 in the District, Maryland and Virginia -- to Aetna Life and Casualty Co. as the policies come up for renewal. An Aetna spokesman said he expects his company's premiums to be "comparable and competitive" with Geico's.

Homeowners insurance accounted for about 6 percent of Geico's approximately $2.4 billion in annual premiums, said David L. Anderson, director of investor relations at Geico. "Homeowners policies have been declining slightly" in recent years and "we find it harder to find economies of scale in writing and servicing the business," he said.

Homeowners insurance has been profitable for the company in eight of the past nine years, Anderson said, but the exception was a big one: 1992, when Hurricane Andrew swept through south Florida, costing Geico $81.1 million. Last year was the second worst in company history, with catastrophe losses of $19.4 million. As a result, the company's homeowners business produced only $1.6 million in underwriting profits.

For Aetna, the deal offers a chance to spread its risk "in areas where we see lower catastrophe risk and where we want to grow," said Aetna Vice President Robert P. Restrepo Jr. If Geico policyholders stay with Aetna, that company will more than double its business in the District and Maryland, and almost double it in Virginia.

The handoff of the business to Aetna, which both companies said is not a sale or purchase, will be handled through Geico's Insurance Counselors Inc. subsidiary. ICI is a brokerage that places risks elsewhere when Geico does not want to assume them. For example, Anderson said, if an auto policyholder bought a Ferrari, "we might not want to carry that," but rather than send the customer to another company, ICI would find a another carrier willing to take on that risk.

Effective July 28, ICI will be hooked into Aetna, and when new customers come in they will be quoted coverage by Aetna, Anderson said. And beginning next Jan. 1, when current Geico policies expire, ICI will offer them Aetna policies.

The change means an end to dual policy discounts offered to holders of both homeowners and auto coverage through Geico, Anderson said. Under terms of the agreement between Aetna and Geico, ICI will not offer Aetna auto policies to Geico homeowners customers.

Presumably, though, homeowners in Maryland and Virginia could go to another Aetna agent and ask about auto coverage and a dual policy discount, which the company offers in those states. Aetna does not write auto coverage in the District.