Prudential is to sell personal medical insurance in 1,500 Boots stores in an attempt to grab a higher share of the £3bn-a-year market.
The partnership with Boots was announced as the insurer revealed another drop in sales of life and pensions products in the UK. In the first quarter of 2007, domestic sales were down 23% at £183m, although its operations in the US and Asia both reported a sharp rise of 21% and 34% respectively.
PruHealth, which has agreed the venture with Boots, is not included in the overall figures but wrote premiums worth £16m, up 100% on the same time last year. It insures 100,000 people and the Boots deal should double that number.
The insurer is in the throes of a major reorganisation of its UK operations, which have struggled to keep up with the competition in recent years since it axed its traditional "Man from the Pru" door-to-door sales. The group hopes to cut £195m from annual costs by 2010 in a move that puts some 3,000 jobs at risk.
The UK operations are the most troublesome for Mark Tucker, Pru's chief executive, who is under pressure over the performance of the group, which last year saw off a takeover approach by its rival Aviva.
Mr Tucker admitted yesterday that Pru had not sold any bulk annuities - once a thriving part of its UK operations - in the first quarter, which helped contribute to the fall in sales in the first three months.
But he noted that if a deal to buy Equitable Life's with-profits annuities had been included, sales would have been up by more than half. That business will not be included in the figures until later this year.
He stressed that sales of life and pensions products to UK retail customers were up 16% and pointed out that this business was less volatile than the wholesale market.
Tim Young, a Collins Stewart analyst, said the insurer appeared to be losing market share in Britain to rivals such as Legal & General.
"The problem originally stems from the questionable decision to shut down the direct sales force," he said.
The deal with Boots will work in such a way that customers will be able to cut their monthly premiums by collecting "vitality points" by completing an online health review, having a stress or eye test, or downloading online meal plans.
According to sample figures, a woman of 50 would pay £85.76 a month in the first year but half that sum if she joined the Boots Health Club. In the second year the premium would rise to £92.62 a month but could be cut to £71, £49, £28 or £7 a month depending how many points she earned.
PruHealth's chief executive, Shaun Matisonn, said the deal would make private medical cover "more accessible and affordable via the high street and really begin to change people's attitude to health".
Prudential's shares rose 1.57% to 745p.
