Coles Reveals Plan to Enter Insurance Industry

Submitted by Jim Thesiger on 4 September, 2009 - 05:45

Coles (CGJ), one of the leading supermarket companies of Australia is planning to boost its effort to strengthen up its position in the financial services sector by entering the competitive general insurance market. Coles have announced its trialling range of insurance products that includes car and home and content insurance in the Tasmanian stores of the company which might be an opening to go for the broader national market. If the project goes well, Coles will be the very first supermarket to plunge into the general insurance industry that worth $24 billion. The model that the company is about to implement has been proven effective for the overseas retailers, especially for Tesco in UK.

Coles entrance in the insurance market is going to be a major strike against Woolworths which also made its way into the financial service industry by launching credit card. However, Woolworths is yet to declare its plans regarding expanding its business. The major rival of Coles is currently working on its plans to enter the $36 billion hardware market where US based world’s second biggest home improvement retailer is partnering the company. Woolworths is expected to become a key competitor in the hardware business for Wesfarmers, which is Coles’ parent company.

The six month long trial of Coles’ general insurance offering will involve 29 stores that include service stations and supermarkets. Jim Cooper, the spokesman of Coles stated that the company was considering the possibilities of entering the insurance industry as it worked well for supermarkets in other countries. Coles’ future plans regarding the general insurance project will depend on the outcome of the six month trial period, he added. The insurance products of Coles will be sold through brochures available in-store that direct customers online or to a call centre where customers can have access to more information and sign up. Coles’ insurance brochures will start arriving in its Tasmanian stores this week. Wesfarmers General Insurance, the subsidiary of Wesfarmers will underwrite the insurance cover.

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