TESCO, the British-based supermarket giant, has started selling car insurance online in an attempt to break into the €1.7 billion market in Ireland.

The retailer, which controls 25% of the €7 billion Irish grocery sector, launched the service on its website last week and plans to undercut existing insurers. Motor insurance rates have been coming down in recent years with established players claiming premiums have been cut by up to 30% in some cases.

The product is underwritten by Hibernian Insurance, one of the country’s biggest car insurers. Hibernian also underwrites Tesco’s life assurance product.

To help push the launch, all those who register for a quote are being given the chance to win €1,500 worth of groceries at Tesco.

Quotes are available to registered users at the Tesco.ie website. These are predominantly members of the firm’s Clubcard loyalty scheme who also order their groceries online.

The supermarket group is expected to market the service by direct mail to its loyalty scheme members as well as running promotions in its 86 stores. More than 1m Clubcards are believed to have been issued in Ireland.

Tesco provides a range of financial services products in the UK including mortgages, pet and travel insurance, and savings products. To date, its Irish subsidiary has offered credit cards, life insurance and personal loans although it is expected to expand this product range over time.

Ireland’s motor insurance market is currently dominated by seven players: AXA, Aviva (which owns Hibernian), Allianz, Royal & Sun Alliance, Eagle Star, Quinn Direct and FBD. These accounted for 90% of the market last year.

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