Supermarket giant enters motor insurance market

fjon

Today's Indo:

Supermarket giant enters motor insurance market





SUPERMARKET giant Tesco is entering the Irish motor insurance market.

The British chainstore, which has already shaken up the petrol retailing business with its competitive approach, will begin selling car insurance here in the next few months.

The company made the announcement to the Oireachtas Committee on Enterprise and Small Business yesterday.

Competitively priced insurance would be made available through Tesco Personal Finance which already provide credit cards, life insurance and personal loans, said spokesman Dermot Breen.

Full details of the motor insurance offerings will be unveiled shortly, he said.

The Consumers Association of Ireland welcomed the entry of Tesco into the car insurance market as it had been static too long, said Chief Executive Dermott Jewell.

"It's good to see another player coming in because it has been standing still for a while. Tesco would not be getting into the market unless they thought they could be competitive. They obviously see an opening here," he said.

While car insurance costs had fallen slightly in recent times, there was plenty of scope for them to reduce further, but consumers tempted by the ease of buying insurance in the supermarket must continue to shop around for the best deal, he said.

Tesco has been steadily increasing the share of non-food items it sells in its 86 Irish stores, such as petrol, clothes and CDs.

But Tesco denied a claim at the Oireachtas Committee that they had put family-run petrol stations out of business by offering cheaper petrol in stores such as Killarney and Finglas. Committee Chairman Donie Cassidy said five family-run filling stations had closed within a five-mile radius of the Tesco filling station in Killarney.

Mr Breen said it was not their intention to put other retailers out of business, but simply to offer consumers good value for money.

Some 700 petrol stations had closed in recent years, including 140 last year, and this was mostly because of rationalisation by oil companies rather than cheaper competition from Tesco, he said.

Other stations in the Killarney area were thriving since Tesco arrived and it was possibly that some had closed because of general over-supply in the area, he said.

Tesco did not engage in below-cost selling for petrol, even when they had special low-priced introductory offers.

Tesco employed 11,300 people directly in its stores and had created 4,600 jobs since 1998, including 1,600 in supplier businesses.

They also had over 10,000 farmer suppliers and were the biggest purchaser of Irish food in the world, which accounted for €1bn or half of their Irish sales and another €420m exported to the UK.

Sleipnir

Can only be a good thing.

Alun

Very interesting I wonder though how this will work. Will they, like the AA, merely be acting as a broker for the major insurers already in Ireland, but presumably getting some kind of "bulk discount", or do they have some sort of deal with a UK insurance company? I wait with bated breath ...

mike65

They're subject to the same high costs as the rest so it'll interesting to see what they can shave off existing premiums.

Mike.

Seth Brundle

according to [url]www.tescofinance.com:-[/url]
"Tesco Car insurance is underwritten by UK Insurance Limited, a member of the General Insurance Standards Council. Conditions apply."
so I presume they are acting as an insurance company rather than a broker (assuming they do the same here).
I know from dealing with many people in the UK that Tesco are very competitive and their arrival here can only be a good thing for the market*.

* possibly!

De Hipster

Any competition within the insurance market in this country should be welcomed...but I'd err on the side of caution with Tescos due to their (mainly grocerystore) pricing differences between Ireland & the U.K. which are being put down to mostly transport costs...so explain why it's so expensive to transport between N.I. & R.O.I., especially considering fuel costs are cheaper??!!

The Muppet

Just to echo what every one else said It a very welcome developement and I for one won't be shedding tears if it puts a few current companies to the wall.

mike65

The Muppet wrote:

Just to echo what every one else said It a very welcome developement and I for one won't be shedding tears if it puts a few current companies to the wall.

No No No! We want Tesco to reform the market not become a sole major player!

Mike.