Building a differentiated insurance experience for Tesco
April 7, 2022 Greg Brown
Tesco is one of the UK’s best-known brands. It serves millions of customers every day in the UK and Europe across its grocery, mobile phone and banking and insurance businesses. 20 million of us are Clubcard holders – over a quarter of the UK population.
Tesco Bank originally entered the UK retail insurance market as a broker, using a panel of carriers, in the late 1990s. In 2009, Tesco created a joint venture with Ageas’s UK subsidiary, Tesco Underwriting, to build and underwrite its own home and motor products.
After several years of successful trading, Tesco Bank asked itself how it could make its insurance proposition “more Tesco”. What did its famous slogan “every little helps” mean in an insurance context? How could it serve its insurance customers “a little better every day”?
This is a challenging question to answer in the UK, where most retail insurers just provide capacity into a price-led market dominated by comparison sites. Many customers have never heard of the brand they select for their home, motor, pet or SME insurance.
But Tesco wanted to do more. Customer experience is central to the retailer across all of its businesses. Consumers recognise and choose the Tesco brand, which comes with expectations of trust, delivering value, and rewarding loyalty. Equally, Tesco is uniquely well placed to provide personalised experiences to its customers given its deep customer insights.
How Oxbow Partners helped Tesco Bank
In 2017 Tesco Bank kicked off a multi-year insurance transformation programme, which Oxbow Partners was pleased to support.
Developing a personalised, digitally enabled claims journey
Tesco Bank started with a review of the claims journey, which is a moment of truth for Tesco’s insurance brand. Disappoint your customers here, and you could do damage across the business. We supported Tesco Bank in understanding what its brand meant in an insurance context and to develop an end-to-end experience that centred around the concepts of ease, value and trust.
A valuable output was ‘Claire’s journey’, which brought the new Tesco Bank claims experience to life for all colleagues. It is still central to development of the claims proposition.
We helped Tesco Bank implement the new experience, including to select a digital claims platform and system implementation partner.
Over 30% of new motor claims are now reported digitally, claims processed on the platform are settled around four days quicker than other channels, and over 40% are ‘no touch’, meaning the full journey can be done through digital channels such as the app.
Developing a differentiated growth strategy
With the claims transformation underway, attention turned to a growth strategy. This included an analysis of the UK market and identification of sustainable growth opportunities for Tesco Bank. The ambition was to be a little different to a regular insurer and leverage the huge advantages that the brand had in the market.
The key take-away for Tesco, facilitated by Oxbow Partners, was to align its insurance business more closely with its core grocery business and develop bespoke, Tesco-branded products.
Tesco Bank then announced its intention to own Tesco Underwriting in full by acquiring the stake of its joint venture partner. This would give Tesco Bank greater control over its underwriting platform and enable the creation of an end-to-end insurance business uniquely positioned to help Tesco shoppers.
Bringing Tesco Underwriting into the Tesco family
With the decision taken to bring Tesco Underwriting into Tesco Bank, we supported the post-merger integration planning and execution. This included designing and setting up a multi-million-pound transformation programme, supporting the design of the target operating model, and helping to create an end-to-end technology strategy.
Tesco Bank has transformed its insurance business and this has provided the foundations to perform strongly in terms of both customer experience and growth.
We are proud of the strong partnership we have built with the team over the last five years and look forward to supporting them further in the future.