Direct News: Norwich Union backs HPI used-car service

Norwich Union is drawing up plans to move into the used-car and secured loans market following the acquisition by its parent Aviva of HPI, the UK's biggest second-hand car database.

The insurance company plans to use a heavyweight DM campaign to inform its customers about the HPI service, which charges £40 to check the history of second-hand cars.

Prior to Aviva's purchase of HPI for £120m this month, the database was used mainly by car dealers. Norwich Union will be mailing 6.8m of its users.

To establish HPI as a consumer brand, the insurer will advertise the service in the second-hand car ad pages of the motor and consumer press.

It is also promoting its ownership on its website.

Norwich Union Insurance's sales and marketing director, Brigitte Macintyre, said that in the long term, the acquisition of HPI will enable Norwich Union to move into the used-car and secured loan markets, with the ultimate goal of becoming a multi-service provider in the motoring industry.

This would position Norwich Union alongside the AA and RAC, which have diversified their core business from roadside recovery to offer insurance, personal loans and legal services.

HPI handles about 3m transactions every year. Its database holds information on vehicles such as their value, mileage, outstanding finance and whether the car has been an insurance write-off.

HPI, which is based in Salisbury, Wiltshire, was established in 1938. The company has a 60% market share, and posted a 36% rise in sales to £22.5m in the two years to March 2004.

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