Opening up a new front in the fierce High Street war for customers, Sainsbury’s has announced it will be going back into direct competition with supermarket giant Tesco by relaunching its motor car insurance business.
By partnering with RBS Insurance in order to provide discount car insurance to its customers, Sainsbury’s estimates an approximate 15 per cent savings on car insurance rates. Sainsbury’s shoppers will additionally be able to earn loyalty points equivalent to one per cent off their insurance premiums for the first two years of their policy.
The average motor insurance premium in the UK has risen by an estimated 30 per cent over the past 12 months, according to official figures. Industry experts agree that the Sainsbury’s deal could result in high popularity amongst those motorists looking for cheaper car insurance.
As supermarket chains turn to providing financial services to customers in a vicious struggle for profits, Tesco is estimated to have nearly five per cent of the entire car insurance market in the UK. The retail giants feel that they can utilise brand recognition to lure customers away from other car insurance companies that have had their reputations tarnished in recent years.
Sainsbury’s motor insurance head, Ben Tyte, remarked that up until now the supermarket chain has been providing car insurance through esure. However the firm wished to expand and impact the market in a more significant way.
Sainsbury’s insurance arm has been experiencing growth over the past 12 months. Estimates indicate a growth of about 25 per cent since last year, with profits of £30 million before tax. Sainsbury’s feels that the time is now to take on Tesco in the financial services market, despite the fact that their other insurance lines have been experiencing major growth.