Bread, Milk & Car Insurance
With increased competition between supermarkets to gain market
share and improve profitability, the range of products on offer
is getting ever diverse. Now, the big three chains, Tesco, Sainsbury
s and Asda have caught on to the fact that their brand name can
sell just about anything, including of all things, car insurance.
is one of those very boring expensive products that you loathe having
to pay for but have no choice if you want to drive a car on Britain
s roads. Why therefore would supermarkets want to be associated
with such a seemingly expensive pain in the pocket? Well it seems
that the public think it s a great idea and are buying it from these
stores in their thousands with the belief that it must cheap if
the supermarkets are selling it. The strange thing is that the companies
behind these deals, who are actually underwriting the injury
claim risk, are the same companies who have been selling you
car insurance for years.
Tesco for example seem to be incredibly successful in selling motor
insurance to their customers with statements proclaiming that you
could save up to 150 compared to some leading insurers. Tesco of
course is not an insurer. If you look closely at the bottom of the
Tesco car insurance webpage, you will notice it says that the policy
is provided and underwritten by a company called UK Insurance Limited.
Who on earth is this company you may ask. UK Insurance Limited is
part of Royal Bank of Scotland who also own Direct Line along with
Churchill and Privilege.
Sainsbury s state that you could save up to 165 on your car insurance
compared to other leading insurers - 15 better than Tesco. Of course,
like Tesco, Sainsbury s is not an insurer either. A quick look at
their webpage shows that policies are arranged and administered
by Esure, who are part of the Halifax Bank of Scotland group. Maybe
Sainsbury s are about to swap Jamie Oliver for Michael Winner maybe
Asda state that they give you the very best possible insurance
protection and offer a 10% discount if you buy online. Of course,
just like Tesco and Sainsbury s, Asda is not an insurer. Asda have
opted to team up with Norwich Union to provide their policies.
The insurers are desperate to get into bed with the Supermarkets.
It enables them to dress up their car insurance product with an
already well known and trusted brand name. This is good business
and a smart way to gain lots of new customers very quickly. Ironically
though, some of those new customers may already be with that insurer.
Without knowing it, they may end up cancelling or not renewing their
existing policy but staying with the same insurance company via
the cheaper supermarket option.
From a customer perspective, the upshot of all this will hopefully
be to get cheaper car insurance, which at the end of the day is
what everybody wants. Who the insurer is behind the deal is probably
not of great concern to people. In the long term, whether the actual
underwriting results of these deals are profitable enough for the
insurers to continue to offer the supermarkets good rates for their
customers, will be interesting. One thing is for sure, I don t see
Direct Line advertising bananas six for a pound anytime soon.
Copyright (c) 2004 AcceptDirect.co.uk http://www.acceptdirect.co.uk
Andrew Bowen is the CEO of Accept Direct Limited. Accept Direct
offer car insurance to UK customers through their website http://www.acceptdirect.co.uk
Car Insurance Resources