Simple Cover offers fully comprehensive car insurance without lots of add-on’s that can affect a motor premium, says Mark Godfrey, head of Norwich Union Direct Motor Marketing.

"Easy and straightforward, Simple Cover is the perfect solution for time-poor, Internet savvy motorists on the look-out for quality insurance at cheaper prices," he says.

The new service pits the UK's largest general insurer against online-only rival esure, which has prospered by offering low-cost auto insurance to Web bargain hunters.

Nonetheless, Norwich will have to give up more margin if it is to take on the low-cost offerings of rival interlopers. As Richard Mason, director of insurance at moneysupermarket.com points out: "This insurance from Norwich Union is still vastly more expensive than other products on the marketplace; you will pay £3701 when a comparable policy can be bought from Tesco for £239.40.

"Individually tailored car insurance is the right way for the market to go, but the providers are going to have to smarten up their act if they hope to be competitive."