Tesco’s motor and home insurance policies are to be underwritten by Fortis following a partnership agreement between the two firms.
The deal is set to create up to 1,500 UK jobs, with premiums sold by Tesco worth an estimated £500 million per year.
Fortis will replace RBS-owned UKI Partnerships as Tesco’s insurance partner if the deal, currently agreed in principle, is ratified.
Tesco said it intends to capitalise on the weakness of high street banks by expanding its range of insurance products.
Fortis and Tesco are expected to finalise the deal within the next two months.
Tesco’s finance arm was previously run as a 50:50 joint venture with RBS, until Tesco acquired full control of the company in July last year.
A Tesco spokesperson said it has always been their intention to find a new underwriter since it bought out RBS.
Fortis currently underwrites insurance policies for M&S and John Lewis, and sells travel insurance policies for Alliance & Leicester and the Post Office.
