Supermarket personal finance arm sees 67% profit leap in annual results by Angelique Ruzicka and Jonathan Russell
The former head of insurance at Tesco Personal Finance, Paul Baxter, has been appointed head of motor insurance at Direct Line.
Allan Burns, who was formerly head of lending at Tesco, will take over as head of insurance at Tesco.
The news came as the supermarket chain announced its results for 2003. Tesco Personal Finance saw its profits leap to £160m in 2003, up 67% from £96m in 2002.
A spokesman for Tesco Personal Finance said half of the profit will go to Royal Bank of Scotland, which is Tesco's joint venture partner in the personal finance business.
The spokesman said the company was pleased with the performance of its insurance operations: "We have enjoyed phenomenal growth."
He added that the company had little to worry about in the event of an insurance price war with other supermarket chains.
"We will encounter competition from Sainsbury's and Asda, but we remain undeterred.
"As we don't have a bad claims history and are not carrying any losses we have more room to manoeuvre than our competition," the spokesman said.
The retailer claimed that its motor insurance book is the fastest growing in the country.
The spokesman said that since introducing motor insurance in 2000, Tesco has sold 1.1 million policies.
However, its travel insurance, introduced in May 2002, has only sold 160,000 policies to date.