Tesco insurance comparison site launched

Supermarket giant Tesco last week launched a price comparison site for motor insurance, called Tesco Compare. The number of such comparison sites has mushroomed in recent years, with independent websites like Moneysupermarket.com, Comparethemarket.com and Confused.com now household names. With so many comparison sites already in existence and concern that Tesco might “push” its own financial products, how is Tesco Compare planning to compete?

Firstly, Tesco is quick to point out that there is no favouritism when it comes to car insurance recommendations. The site does obtain quotes from Tesco Car Insurance, but they are treated in the same way as any other car insurance product. So, according to Tesco, their new site is as independent as the rest. The site makes its money by acting as an introducer for car insurance providers and therefore earning a commission. The client pays the same price as going direct.

Tesco Compare does appear to differ in a couple of areas, which may help to set it apart. Firstly, quotes are obtained which take into account all the personal details which are entered by the customer. Other comparison sites make more assumptions, and are therefore less tailored to the individual. Tesco Compare works on the principle that the more information you give, the more accurate the calculated premium will be.

Secondly, Tesco Compare includes Royal Bank of Scotland (RBS) products. Tesco Personal Finance is partnered with RBS, presumably the reason that the bank is releasing its products to Tesco Compare when it has withheld information from other price comparison sites. As the parent company for Churchill, Nationwide and Privilege, RBS offers a lot of insurance products. In addition, Tesco Compare will give quotes on Lloyds TSB, Prudential and Virgin motor insurance products, none of which are currently featured on price comparison sites.

Debra Williams, Managing Director of Confused.com, believes the range of products being compared by Tesco is smaller than it seems. She believes that the high proportion of RBS-linked products make Tesco Compare one of the “least comprehensive” price comparison services. She adds:

"Unless Tesco significantly increases its panel of insurers it is highly likely that many, perhaps even most, of its customers are missing out on the cheapest deals."

With plans in the pipeline to expand the price comparison service, incorporating home insurance and other financial products, it seems that soon there won’t be much you can’t buy through Tesco!

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