Tesco joins comparison site market with RBS backing

TESCO Personal Finance has launched a new company, backed by Royal Bank of Scotland, to offer a price comparison website.

As part of its joint venture with RBS, the financial services arm of the supermarket giant has set-up Tesco Compare. It will initially focus on providing motor insurance quotes, but plans to expand to other product areas.

It will take on big players in the burgeoning market, such as Moneysupermarket.com, which recently floated on the London Stock Exchange.

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The entrance of a major household brand into the comparison site market is an indication of the competitive nature and growing maturity of the sector.

The proliferating number of sites include the likes of SMG-majority owned Peopleschampion.com, uSwitch, Confused.com and Fool.co.uk to name but a few.

Tesco Compare.com will be live from Friday and it claims it will differentiate itself from rivals by comparing more than 24 motor insurance policy features.

Robin Bulloch, chief executive of Tesco Personal Finance, said: "It will go way beyond just price to provide comprehensive details on policy."

Peter Dingle, who was previously managing director of solutions with RBS, is heading up the new company.

He said: "The other major sites typically compare about six things. This will go into the guts of the policy."

At launch, visitors can compare 29 products from 25 brands, but a number of these are owned by RBS.

These include Churchill and Privilege which are appearing on a comparison site for the first time.

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But Direct Line, another RBS insurance brand, is still refusing to be included on any sites.

Nationwide, Lloyds TSB, Prudential and Virgin, all underwritten by RBS, are all appearing exclusively on Tesco Compare.

Big names on the site which are not linked to RBS include More Than and AA.

Dingle added: "There will be no extra costs or charges when it comes to paying your insurance, the price quoted will be the same as if the customer went direct."

But rival sites have questioned the independence of Tesco Compare.com.

Jim Spowart, chairman of Edinburgh-based Peopleschampion.com, said: "I have to ask how independent Tesco Compare really is. It needs to cover the whole market, including Direct Line, if it is to have any long-term credibility."

Debra Williams, managing director of Confused.com, said: "Tesco currently offers one of the least comprehensive services and will need to go someway to convince its customers of its impartiality."

"At the moment it's fair to say that this is an exercise in 'brand over breadth' for Tesco."