The Tesco Personal Finance division of supermarket chain Tesco is reportedly making its first venture into health insurance. According to The Scotsman, Tesco will offer products up to 32% cheaper than comparable products already on the market, in partnership with AXA PPP Healthcare.

The newspaper has reported that Tesco aims to shake up the private medical insurance (PMI) market, undercutting leaders such as BUPA and Standard Life Healthcare by using its vast distribution network to introduce competitive health insurance that combines value and simplicity.

Jeremy Sutton, head of savings and investments at Tesco Personal Finance, commented: Our customer research suggests that perceived high prices, complicated products and complex medical questions have been major stumbling blocks to buying health insurance. Our approach will open up the market to people who want the choice that health insurance offers.

According to the Scotsman, Tesco will offer either premium or core coverage, both of which will be easy to purchase, as customers under 76 will not need to answer any questions. Tesco will also use moratorium underwriting to keep the application process short.

This means that the policy will not cover any condition where the customer has sought advice, medication, or treatment in the three years before joining the plan. If the policyholder is unaffected by the condition in the following two years, it will then be covered by the plan.

According to the newspaper, if customers prefer to be fully underwritten, there will also be the option of completing a medical questionnaire to ensure more comprehensive coverage. Customers will be able to accumulate a no claims discount of up to 55% over four years.

Steve Flanagan, commercial director of BUPA, has been skeptical about Tesco’s move, however, stating that the use of moratorium underwriting could cause problems. According to The Scotsman, he stated: This could cause brand issues if people don’t know what they aren’t covered for and their claims are turned down.

Furthermore, Julian Ross of Standard Life Healthcare, is quoted as commenting: Tesco’s products are at the more budget end of the market, but the average PMI customer tends to be over 50 and pretty discerning.