Insurers targeted by Post Office
The Post Office has drawn up ambitious plans to quadruple its share of the home and motor insurance market in the next five years.
It aims to take on giants such as Norwich Union and Direct Line to become a top five motor and household insurer.
A subsidiary of Royal Mail, the Post Office is already one of the fastest-growing insurers, having written 500,000 policies since it entered the market two years ago.
It currently insures one in 50 cars in Britain. However, the company is aiming to write 2m policies, equivalent to GBP 1 billion in premium payments, by 2012.
If successful, the Post Office’s market share would increase from about 2% to 8%, propelling it from 15th largest motor and home insurer into the top five.
The British motor and home insurance market is led by Royal Bank of Scotland, which owns Direct Line and Churchill, with about 25% of the market and Norwich Union, with a share of about 19%.
The Post Office’s plans include a partnership deal until 2012 with Budget Group, a privately owned South African company, which produces branded insurance policies.
Junction, Budget’s affinity insurance arm, acts as an intermediary using a panel of other insurers to get the best deal. The company also has partnerships with Marks & Spencer Money, mortgage bank Bradford & Bing-ley and Debenhams.
The aggressive expansion plan comes after Alistair Darling, the trade and industry secretary, announced the axing of about 2,500 post offices in the next 18 months, slashing the network to about 11,800.
The government insisted that the cuts were vital to maintain the network, where losses have doubled over the past two years to reach GBP 4m a week.
Post Office insiders played down suggestions the closures would hamper its insurance sales ambitions.
