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25 August
2006 Tesco To Start
Motor Insurance Price War A price war in
Ulster's car insurance market is looming after
Tesco announced that it was entering the
fray. The supermarket
group said its aim was to undercut existing
premiums in the province which it said were too
high. The development
should be good news for Northern Ireland's
hard-pressed motorists, who for years have endured
by far the highest prices in the UK. Stewart Neill of
Tesco said: "We are committed to reducing premiums
for the vast majority of motorists in Northern
Ireland.Our research has established that car
insurance in the province has been too expensive
for too long, and in some cases is double what we
are charging in Britain." As an opening
gambit, Tesco said Clubcard holders who take out
car insurance would have a cashback offer of up to
£80. Tesco, which
started its car insurance business in Britain in
2000, is currently the third biggest player in the
market with 1.5 million customers. The company
expects to do the bulk of its business over the
internet, where customers will qualify for a 10%
discount, but says cover can also be arranged over
the phone. But there are
exclusions - the high-risk under-21 age group will
not be covered. Mr Neill said:
"We are not cherry-picking. We will quote for
anybody aged 21 or over and for the majority of
drivers with a few years of no-claims we will be
able to cut their motoring costs." But Mr Neill
acknowledged that because of factors such as the
historically higher awards made by courts in
Northern Ireland to people injured in car
accidents, premiums here were likely to be higher
than in Britain. But as examples
of the savings it could offer, Tesco said it would
provide cover for a 40-year-old male with five
years no-claims, living in east Belfast, driving a
2004 Ford Focus 1.6i Zetec with a limit of 10,000
miles a year. It said its
premium would be £231, compared to quotes
ranging from £387 to £459 from other
leading insurers. Mr Neill said
Tesco was able to cut costs because it marketed its
product through its stores and filling
stations. Nobody was
available for immediate comment from leading local
insurance companies Quinn-direct in Enniskillen or
Hughes & Co in Newtownards. The Tesco move
will not create any additional jobs in Northern
Ireland, where the company already employs 8,500
people in a network of 33 stores. Tesco and the
other supermarket chains are already involved in a
petrol price war in Northern Ireland, but rival
retailer Maxol has said the lower prices are not
sustainable. There have long
been complaints from the public in Northern Ireland
about the high cost of insurance. Insurance
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