Sainsbury's Bank is launching an assault on the motor insurance market, with the creation of an own-brand policy.

It is in talks with several insurance providers to underwrite the product.

The favourite is understood to be HBOS, the result of a merger between Halifax and the Bank of Scotland, which owns 45% of Sainsbury's Bank.

HBOS has forged ahead in the insurance market in the past year, with esure, the cut-price motor insurer launched under the executive chairmanship of Peter Wood, founder of Direct Line.

Sainsbury's supermarket rival Tesco teamed up with Direct Line when it launched its own insurance policy two years ago. It has since signed up 400,000 customers.

The Sainsbury's motor insurance product will be sold online and off the shelf through Sainsbury's 455 stores, with support from a call centre. Other details of the product have yet to be decided.

Deputy chief executive of Sainsbury's Bank Derek Bottom said: "The main aim is getting people to switch from other banks, so there is plenty of room for Sainsbury's and Tesco in the market."

He added that Sainsbury's was looking to launch the motor policy by the summer and would decide on the insurer in the next few weeks.

The motor policy will be targeted at Sainsbury's 1.5 million banking customers and more than 11 million shoppers.