Bouquet of products from Virgin Money
Virgin Money has been diversifying into a variety of products in the last few years and the latest product it has planned to offer in its bouquet is the sale of a car insurance product to its customers. The company has plans to introduce personal loans, deposits, credit cards and home loans as well in the next two years as per statement issued by Sir Richards.
The company had first got into the business of credit cards some five years back when it launched a low cost credit card in collaboration with Westpac and soon had about 750,000 accounts. All these customers were inherited by Westpac when the contract between Virgin Money and Westpac ended about a year back.
Virgin Money has recently entered into a 10 year contract with Citibank for rolling out credit cards with an exclusive profit sharing agreement during this period. This credit card called the Citibank-Virgin card is expected to be issued from July, 2010, which is likely to be followed by online deposit account and retail savings. These accounts will not have any branch access and are planned to be operated online or through Citibank’s call centres existing at present. The Citibank Virgin joint venture also has plans for introducing a Virgin Blue credit card that will be linked to budget airline with provisions for reward points. This card will have direct competition with Quantas-associated credit cards.
The Australian car insurance segment is highly concentrated with about 75% of the market covered by brands owned by Suncorp-Metway and IAG. The focus of the strategy of Virgin Money as regards selling car insurance products is to offer customers insurance at a much cheaper cost compared to the existing rates in the market. The company plans to offer its products at about 35 to 40% cheaper. Virgin Money was targeting a customer base in this segment of about 40000 to 50000 in about one year time. It is planning to offer insurance products that are capped for two years and thirteen months at the price of 12 for comprehensive cover chosen by customers online. The Auto & General Insurance Company, the largest insurer of South Africa, which is planning to expand into Australian market, is underwriting the Virgin Money’s car insurance offerings.