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Asda joins High Street retail giants to offer direct motor insurance services

Asda is joining Sainsburys, Tesco and Argos in offering a motor insurance service which will put car retailers under greater pressure to maintain point-of-sale finance and insurance business.

A subsiduary of the US retail giant Wal-Mart, Asda's car policies will be underwritten by Norwich Union and the car insurance will be marketed via its 263 stores by phone and online.

Sounding a warning that the supermarket chain can “make a very real difference to the insurance sector” David Rutley, Asda's director of financial services, promises “a real focus on every day low prices.”

The decision to roll out the car insurance scheme, alongside home and travel cover was made after a successful pilot programme. But Asda denies its car insurance involvement will inevitably lead its financial services division into the congested motor finance sector.

A spokesman says: “I cannot rule it out for the future but it is not in the existing business plan.”

Customers taking out home or motor insurance with Leeds-based Asda will qualify for a five per cent discount on an additional car policy while policies commissioned online benefit from a 10 per cent saving. Meanwhile, Tesco's new breakdown service undercuts Green Flag by 10 per cent.

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