Patrick Smith, former managing director of Norwich Union Direct and Norwich Union Healthcare, has secured £7m from venture capitalists to set up an online intermediary.

Called its4me.co.uk, the new company will sell motor, home and travel products underwritten by a panel of five insurers.

Smith, who spent 28 years at NU, has a string of successful start-up projects behind him. He launched NU's private health insurance arm in the early 1990s before building the insurer's direct arm.

The new venture promises to deliver customers cheap premiums and a flexible

service.

Smith said: "For the first time, policyholders will be able to look at their records, make adjustments to their cover and notify their claims on line, bringing huge savings in

handling charges, which will be passed on as cheaper premiums."

"The low cost of setting up and servicing policies on the internet rather than on the high street or over the phone will mean customers should be able to save an average 15% on their premiums."

Also, its4me.co.uk will introduce internet-style innovations such as the "name your own price" approach which is already used to sell discounted airline products.

Customers can seek advice from online chat, e-mail and help desks at a dedicated call centre. There will also be an underwriting service for more difficult non-standard cases.

Its4me.co.uk will be chaired by Smith, whose broking experience includes the chairmanship of NU's high street broker Hill House Hammond.

Another ex-NU man, Paul Cheall, has been recruited as managing director. Cheall has been developing e-commerce solutions for the likes of NU, Dell Computers and CGU for the past 10 years.

Smith adds: "We offer choice and expect to be able to offer cover to most of the people who ask us."