New entrant could reach top 15 motor insurers within five years
The Post Office is aiming for £300m worth of premium income within five years of its motor insurance deal with Budget Insurance Services' affinity arm, Junction.
The deal would establish the new entrant in the top 15 motor insurers in the UK, with a market share of about 3%.
Junction managing director Phil Zeildler said: "The Post Office's branch network offers fantastic distribution opportunities. Coupled with the strength and trust of the brand, this means there is a huge opportunity to make in-roads into car insurance and take a significant share.
"Junction's intermediary status is an excellent fit for Post Office's wide customer profile."
The deal with Junction will see Post Office motor policies sold through a panel of 22 insurers starting on 19 July. The broker is thought to have won the business by offering a model that can quote competitively on 99% of all inquiries received.
Zeildler said: "The advantage of the Junction proposition is that by distributing the business through more than 20 insurers we can offer a realistic quote on almost any type of business."
The Post Office plans to trade on its huge high street presence to drive up its customer share. It has 16,500 branches and 97% of drivers buy road tax at post offices.