Asda is to offer home, travel and motor insurance to its customers as the first step of a major assault on the financial services market. Having seen the amount of business that rivals Tesco and Sainsbury have picked up, the Wal-Mart owned supermarket wants a piece of the action.
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The scheme, underwritten by Norwich Union, will offer Asda’s 11 million customers home, travel and motor insurance. The supermarket is also in talks with finance houses with a view to offering credit cards and personal loans.
Asda will be offering “hassle-free insurance at Asda prices”, according to the firm’s director of financial services David Rutley. In an increasingly crowded marketplace, the low cost of its product is expected to be a vital selling point in the battle against the might of its main rivals, Tesco and Sainsbury.
The UK’s two leading supermarkets each launched insurance products in the 1990s, and currently have around 800,000 policyholders between them. Tesco offers policies underwritten by UK Insurance, formerly Green Flag and part of Direct Line, while Sainsbury’s product is underwritten by Royal & SunAlliance. The former boasts 600,000 motor insurance policies and 100,000 home insurance policies, while the latter reported 63% growth in insurance sales in its November interim report.
Last year Asda parent Wal-Mart appointed Jane Thompson to lead a dramatic expansion in financial services worldwide, but has so far been stymied in the US where changes in state and federal laws have seen it twice prevented from buying banks.
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By GlobalDataInsurance products offered by retailers, or ‘brandassurance’, is a growing sector in the UK personal insurance market, attracting customers with cheaper offerings from a company with a trusted brand image. With large and regular customer bases, there are obvious sales opportunities, particularly from supermarkets as they push to provide for more and more of their customers’ retail needs.
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