Giant retailer Woolworths may be set to follow the example of UK and European supermarket chains by offering customers insurance products alongside their groceries.

A joint announcement last week from the company and the Commonwealth Bank, posted on the Australian Stock Exchange website, indicates changes to the exclusivity provisions of their “Ezy Banking” alliance.

There are currently more than 800 CBA/Woolworths Ezy Banking facilities available nationally at Safeway, Big W and Woolworths stores. They have more 400,000 customers with credit cards or transaction accounts.

The alliance, signed in 1999, made provision for a mid-term review, and these adjustments reflect changed market conditions. From the start of 2007, both parties can issue credit cards without any exclusivity obligation to each other.

But a report in the Australian Financial Review suggests Woolworths is looking into selling general insurance and may enter the mortgage market as well.

JP Morgan analyst Shane Fitzgerald told Sunrise Exchange News he believes that Woolworths’ plans involves the distribution of insurance products, and not underwriting. That would be done with a “white label” company.

“The big question is, how successful will that be?” Mr Fitzgerald said. “After all, how many people standing in supermarket queues will be thinking of buying insurance there?

“It hasn’t got incumbent insurers quaking in their boots, that’s for certain.”

A Woolworths spokesman says the speculation has been generated by the media “jumping the gun”. Beyond the joint announcement, Woolworths were not making any further comment.