A range of insurers is essential if Tesco is to muscle into the competitive comparison site market. TescoCompare.com, Tesco’s price comparison site, has announced that three new brands – Admiral, Diamond and Endsleigh – will now be appearing on its site, taking the number of car insurance brands available on TescoCompare.com to 33. In this highly competitive environment, market coverage is everything.

This move will prove beneficial to all parties involved. One of the main ways in which price comparison sites compete against each other is in their coverage of the market. For instance, Confused.com, which, incidentally, is owned by Admiral, boasts that it compares “97% of car insurers on the net”. Tesco Compare’s addition of three new brands, taking its total to 33, will therefore help to strengthen its position.
Tesco Compare can now proudly announce in its television advertisements that it searches 33 car insurance brands for the consumer. However, it will be up against stiff competition this year. Advertising spending is expected to increase substantially as existing players ramp up their expenditure and new entrants come into the market, thus inflating the figures. Advertising spending by price comparison sites more than tripled in 2007 to GBP42 million, with the two leading advertisers spending GBP15.2 million and GBP12.9 million, respectively. It will be very interesting to see how much Tesco Compare spends in 2008. In 2007, it spent GBP1.8 million; however, this is likely to increase significantly in 2008 as it looks to make major inroads in terms of market share.

The new contracts will also benefit the three new insurance companies: Admiral, Diamond and Endsleigh. Price comparison sites, or aggregators as they are known in the insurance world, now account for a significant proportion of new car insurance sales. A recent report estimates that over a fifth of consumers bought a new car insurance policy via an aggregator in 2007. These three brands can therefore only benefit by appearing on TescoCompare.com, as it will help them to generate increased policy sales, while Tesco Compare can use the greater coverage of the market in its advertising.

Further Reading: Uk Personal General Insurance 2007