Direct motor insurer in deal to rival Direct Line and esure

The rivalry is set to intensify between direct motor insurers Churchill Insurance, esure and Direct Line as another major supermarket enters the motor insurance affinity arena.

According to market sources, Churchill Insurance is in talks with Asda about selling motor insurance through its network of 245 supermarket outlets.

An Asda spokeswoman confirmed that Asda would sell financial services in the future, but could not comment specifically on motor insurance.

One source said that such a deal "made sense" and he was "not surprised" that Asda was considering selling motor.

Another affinity deal set to heat up the marketplace is the potential partnership between Sainsbury's Bank and esure. An esure spokesman said the two companies had been in talks for the past three months and that esure was "hoping for a positive conclusion". He could not say when a result would be expected.

Esure is owned by HBOS and was formed by executive chairman Peter Wood, founder of Direct Line, which provides motor insurance for Tesco. Martin Long, who started Direct Line with Wood in 1984, created Churchill Insurance after they parted company.