Sainsbury’s Launches Rival to Tesco Car Insurance
Sainsbury’s, the third biggest supermarket chain in the UK, relaunched its car insurance business on Monday to directly compete with Tesco. This has intensified the war in gaining customers on the High Street.
The relaunching of the car insurance business at Sainsbury’s has been made possible through a deal with RBS insurance. This new offering promises savings of 15% on premiums to Sainsbury’s customers in the form of Nectar Loyalty card points, which customers can also earn equal to 1% of from their bills during the next 2 years.
Until now, Sainsbury’s has provided insurance with Esure, an insurance company based on the internet and telephone. However, Ben Tyte, the head of motor insurance, says that they want to expand and make a big impact on the market. Using the Nectar card to reward drivers who buy insurance is designed to increase loyalty among their customers, he noted. This comes after research has shown that consumers who buy financial services from supermarkets tend to buy more at their stores as well.
The deal also comes at a time when average motor insurance premiums are estimated to have jumped about 30% to £815. The 21% rise in the cost to run a vehicle - the average of which is now £3,090 a year - has also been affected by a 22.9% hike in petrol prices, a 20% rise in VAT and a 5.4% increase in servicing costs. Tyte says that motoring costs have soared in all aspects, and consumers can keep these costs in check by shopping around before they buy.