Tesco confirms it is close to launching mortgages
Friday 29th June 2012
Tesco Bank signed its deal with insurance giant Aviva to provide its customers with life protection products as it confirmed it was entering the final stages of launching mortgages.
Tesco’s launch into mortgages has been repeatedly delayed due to technical glitches. The agreement with Britain's biggest insurer was signed for a five-year period and will begin later this year.
Tesco will sell a range of Aviva protection products, which will be heavily promoted in Tesco’s 2,900 stores, but will be available for purchase only on Tesco Bank's website or over the telephone.
The deal gives Aviva the exclusive rights to sell three simplified products through the Edinburgh-based Tesco Bank business – life insurance, over-50s life insurance, and life insurance with critical illness cover.
The bank said the deal expands Tesco's existing relationship with Aviva, which already provides a private medical insurance scheme for Tesco employees.
David Barral, CEO of Aviva UK and Ireland Life Insurance, said: “This is a fantastic opportunity for two household names to deliver a real benefit for millions of people across the UK who have no family protection in place. We can provide Tesco’s customers with peace of mind, offering a quick and easy way to purchase a range of protection products.”
The forthcoming Retail Distribution Review, which kicks in at the end of this year, may also have influenced the timing of the deal. Analysts expect more tie-ups between distributors and suppliers of life products as a result of RDR.
The deal has seen the supermarket-owned bank transfer the management of life products from its current provider Friends Life, The Scotsman says.
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