Tesco enters car insurance comparison market

Wednesday, 12 September 2007 12:00

Tesco is diversifying into the motor insurance comparison market.

The supermarket claims its new Tesco Compare.com service will allow drivers to compare both the prices and up to 25 policy features and any quote would be the same as going direct to an insurer.

Currently Tesco, backed by Royal Bank of Scotland (RBS), has around 30 different car insurance brands on offer from insurers such as Churchill, AA, More Than and Sheila's Wheels.

"Our customers have been telling us they want more help in choosing their motor insurance. They want more than just the usual 'shop around' tool for insurance premiums," said Peter Dingle, managing director of Tesco Compare.

"We have placed great emphasis on the fact that our site not only compares price but also looks at individual policy features to allow users to make sure they are getting the right policy for them."

The new site has come in for criticism from Tesco's new competitors, for having a limited number of insurers and too many owned by RBS.

"With only 30 insurance brands on its panel, a quarter of which are owned by RBS, Tesco currently offers one of the least comprehensive services and will need to go someway to convince its customers of its impartiality," said Debra Williams, managing director of Confused.com.

"In our experience, 'best prices' often come from smaller insurers who can provide consumers niche pricing. Unless Tesco significantly increases its panel of insurers, it's highly likely that many, perhaps even most of its customers are missing out on the cheapest deals."

uSwitch has highlighted the fact that RBS, and its Direct Line brand, are usually hostile to comparison sites.

"This is a particularly interesting move by the RBS group that, to date, has not allowed any of its brands onto a price comparison service," said Aron Thompson, head of insurance at uSwitch.

"We hope that RBS will now work with uSwitch.com and other comparison sites in order to create a level playing field so that consumers have a free and open market from which they can compare policies."

The Tesco Compare.com site will open on September 14th. It follows the supermarket's other diversifications that have seen it enter the private house sale, personal finance, broadband and mobile phone markets.

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