Tesco, the supermarket group, is to begin selling private medical insurance policies, in its latest attempt to cash in on its dominance in the food retailing market. From today, Tesco will put leaflets advertising the insurance into 1,000 of its stores, with customers able to buy online or by telephone.
While Tesco and other supermarket groups have launched a wide range of financial services products, private medical insurance marks a new departure because it is significantly more complicated.
The health insurance market, dominated by established firms such as Bupa and Standard Life - and worth £3.2bn in new premium income last year, according to the healthcare analyst Laing & Buisson - has been criticised as expensive and difficult for consumers to understand, because the terms of policies vary so much.
However, Tesco claimed it would simplify matters by offering just two levels of cover. Its Core policy will provide basic medical insurance, while the Premium version will offer additional benefits, such as cover for certain out-patient treatments in hospitals.
Tesco is providing the cover in a joint venture with the insurance group AXA PPP. It said premiums would be up to a third cheaper than existing policies.
Jeremy Sutton, head of savings and investments at Tesco Personal Finance, said: "Perceived high prices, complicated products and complex medical questionnaires have been major stumbling blocks to buying health insurance - we aim to change that."