An aggressive push into the financial services market was signalled yesterday by , the trading arm of the former , with the extension of its Goldfish brand into home insurance. The gas supplier - already the fastest growing credit card issuer - has linked with , a specialist motor insurer owned by the and Peter Wood, the multi-millionaire founder of .
However, analysts feared that the move could prompt an investigation by , the industry regulator, as did the launch of the Goldfish credit card. Centrica has taken a bullish approach to home contents insurance. Two pilot projects launched yesterday promise to match existing premiums and provide discount vouchers, worth between a quarter and a third of the annual cost, which can be used towards gas bills or Goldfish card points.
Mr Wood said the venture was expected to move into a profit within three years. "We anticipate being a major player in the market within a couple of years. A lot of people are over-paying dramatically [on home insurance]. The power of the British Gas and Goldfish brands will make them confident to switch to us."
Rob Leonard, managing director of Centrica's insurance products division, said it was a "natural move" towards home and safety products. "We are going to be affected by competition in the gas supply market and we have to find other ways to reward our shareholders." However, he stressed that the product was not designed purely to lock customers into Centrica's gas supply. "We are not interested in ventures that don't make money."
Analysts said it was too early to judge whether expansion of financial services was a positive move. "The big problem investors have is that financial services income is extremely difficult to forecast," one said. "But the more immediate problem is that the level of savings being offered could prompt charges of anti-competitive practice from gas competitors. "It is a question of whether Centrica has to go through the regulatory hoops every time it introduces a new product."
However, analysts feared that the move could prompt an investigation by , the industry regulator, as did the launch of the Goldfish credit card. Centrica has taken a bullish approach to home contents insurance. Two pilot projects launched yesterday promise to match existing premiums and provide discount vouchers, worth between a quarter and a third of the annual cost, which can be used towards gas bills or Goldfish card points.
Mr Wood said the venture was expected to move into a profit within three years. "We anticipate being a major player in the market within a couple of years. A lot of people are over-paying dramatically [on home insurance]. The power of the British Gas and Goldfish brands will make them confident to switch to us."
Rob Leonard, managing director of Centrica's insurance products division, said it was a "natural move" towards home and safety products. "We are going to be affected by competition in the gas supply market and we have to find other ways to reward our shareholders." However, he stressed that the product was not designed purely to lock customers into Centrica's gas supply. "We are not interested in ventures that don't make money."
Analysts said it was too early to judge whether expansion of financial services was a positive move. "The big problem investors have is that financial services income is extremely difficult to forecast," one said. "But the more immediate problem is that the level of savings being offered could prompt charges of anti-competitive practice from gas competitors. "It is a question of whether Centrica has to go through the regulatory hoops every time it introduces a new product."
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