TESCO Bank has signed up insurance giant Aviva to provide its customers with life protection products as it confirmed it was entering the final stages of launching mortgages.
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, including life insurance and critical illness cover. These will be available on Tesco Bank’s website or over the telephone and customers will also be able to obtain information through some of the supermarket group’s 2,900 stores.
The bank said the deal expands Tesco’s existing relationship with Aviva, which already provides a private medical insurance scheme for Tesco employees.
The deal has seen the supermarket-owned bank transfer the management of life products from its current provider Friends Life.
In June, the bank revealed that income had been hit due to delays in moving customer accounts as well as stiff competition in the insurance market which resulted in turnover declining 3.7 per cent decline in its first quarter of the year.
Benny Higgins, the bank’s chief executive, has previously waved away concerns that the bank is not delivering on new product launches – most significantly mortgages, which were initially due to be launched last year. In February the bank also revealed that it would delay the launch of a current account until 2013. But Higgins has always insisted the bank aims to “get it right”.
The bank is thought to be keen to avoid the disaster that has befallen customers of the Royal Bank of Scotland in recent days after Tesco Bank was plagued by its own IT glitches last summer. The problem, which affected hundreds of Tesco Bank customers, occurred as the bank migrated customers across to its own systems from RBS, its former joint venture partner.
The Tesco Bank spokesman confirmed that it completed the last stages of the migration from the RBS system in May.
He said: “We are now in the final phase of testing our mortgage operations and developing the right launch products.”
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