Tesco looks to acquire underwriter

The ownership of Tesco Underwriting (TU) has been thrown into doubt amid claims that Tesco Bank is seeking to buy out its current insurance partner, Ageas.

TU was formed in 2009 to offer Tesco branded personal lines motor and household covers to the supermarket giant’s customer base.

Currently the underwriter’s shares are split between Ageas (UK) owning 50.1% and Tesco Bank with remaining 49.9%.

The company states its vision is to be the “Insurer of choice for Tesco Customers whilst the overall role for TU is to maintain a profitable position within the UK personal lines car and home market supporting the Tesco Personal Finance plc personal lines insurance strategy.”

In 2018 it reported a profit before tax of £24.4 million. The motor portfolio’s underlying performance “showed large bodily injury losses for the current accident year being offset by positive development from prior accident years”.

Within the home portfolio the 2018 result was impacted by escape of water losses from the adverse weather conditions in the early part of the year including the impact of “The Beast from the East”.

It has been reported that Tesco has approached Ageas with a view to buying its shares in TU. It is not known if Tesco would seek to run TU independently or seek a partnership with another insurer.

Insurance Times contacted Ageas and a spokeswoman said: “We do not comment on speculation”.