Almost 400,000 customers deserted British Gas in the first half of the year as its parent firm, Centrica, saw profits take a dive.
Centrica said 399,000 UK homes no longer get their energy from British Gas as a "competitive environment" saw more households switch to rival suppliers.
Chief executive Iain Conn said the first six months of the year had been "demanding".
"The first half of the year has been demanding for Centrica, but the response has been strong and I am encouraged by the progress we have made. I remain confident in our ability to deliver both attractive returns and underlying cash flow growth, as we continue to implement our strategy," he said.
Operating profit for Centrica's UK Home division fell 7 per cent to £516m in the period, while the firm's total revenue fell 13 per cent to £13.3bn. Adjusted earnings fell 14 per cent to £507m.
Claire Osborne, energy analyst at uSwitch.com, said British Gas has benefited from low wholesale energy prices but is still failing to pass on the savings to customers.
She added: "British Gas is the only major supplier to have made three cuts to standard gas prices since the start of last year, so its standard variable tariff is the lowest among the big six. However, its best deal is still almost £290 a year more than the cheapest on the market so customers are likely to find better savings by switching to other providers.
"Energy suppliers big and small continue to eat away at British Gas's market share. The only way that British Gas can start to win back customers is by launching new, competitive deals."