The new deal represents a four-fold increase in the value of the existing contract, which yielded £1.6m of annualised revenues.
Under the terms of the new contract, Nationwide will undertake a greater volume of vehicle repairs for AXA across a number of geographical territories.
Nationwide said the increase in repair volumes would help to underpin its growth strategy for the next financial year to December 31, 2008.
Michael Wilmshurst, CEO of Nationwide, said: "It is increasingly apparent that quality repair capacity is in demand and we are working hard to ensure that we have sufficient capacity to fulfil our customers' requirements.
“The relationship we have established with AXA is working well and believe this new contract is an endorsement of the strength of our business model and the quality of our service."