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Supermarkets & 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.
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 risk, are the same companies who have been selling you auto insurance for years. Get a cheap UK Car Insurance quote NOW => CLICK Here <= 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 not. 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 canceling 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. :)
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