New £100m business takes Fortis to No 2 motor slot
Tesco Personal Finance has confirmed its tie-up with Fortis to provide motor and household insurance.
The partnership will give Tesco responsibility for retail pricing, sales and marketing, customer service and new product development. Fortis will underwrite and handle claims.
The deal will create at least 1500 new jobs.
The pair will create a new £200m firm (£100m from each) to underwrite and manage claims called Tesco Insurance Limited owned 49.9% by Tesco and 50.1% by Fortis. It will start writing business towards the end of next year.
The partnership, which will initially run until at least 2015, covers certain TPF insurance products including car, van and household insurance worth more £500m gross written premium.
Fortis to be UK motor insurer No 2
The deal will add another 1.5 million motor and household customers to Fortis UK's existing customer base of around 7 million people. The number of cars insured by Fortis will increase to around 2.7 million making it the second largest car insurer in the UK.
Tesco Insurance Limited will be managed independently from Fortis UK's other insurance businesses.
Exceptional service to all
Barry Smith, Fortis UK CEO said: "Our strategy is to grow Fortis UK profitably by extending the reach of our products and distribution while remaining true to our high service, low cost ethos. This deal does exactly that.
"The separation of Tesco's insurance business from our own will also enable our general insurnce company to continue to focus on broker and affinity markets. We will continue to work with brokers and affinity partners to provide a wide range of products to their customers, delivered to the same high standards they have come to expect from us.
"We remain committed to providing exceptional service to all."