Tesco, the UK’s largest retailer and a company making a big push
into retail financial services (see RBI 610), is reviewing
a number of its existing insurance affinity deals, with Belgium’s
Fortis reportedly in line to win the contract to manage the
household and auto insurance business, worth more than £500 million
($820 million) a year in premiums.
Fortis, which already provides insurance for a
number of UK retailers, including Marks & Spencer, would
replace Tesco’s long-standing partner Royal Bank of Scotland, whose
Direct Line unit lost Tesco’s life business to Friends Provident in
April.
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Tesco’s financial services arm, set up 12
years ago, has built up a customer base of six million people with
28 products on offer. In the UK, it currently holds market shares
in the car insurance and credit card sectors of 4.5 percent and 7.5
percent respectively and since the start of the year, has increased
its total retail savings book by around £2 billion to £4.5
billion.
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