Aldi will sell car, home and landlord cover in Australia under a new distribution agreement with Honey – the first time the supermarket has added insurance to its offer worldwide.

Aldi Australia group director Rodney Balech says people have been “calling for a trusted insurance provider that ... doesn’t break the bank” and the retailer’s new offer “provides clarity in a notoriously complex sector”.

“We’re bringing our expertise in competitive pricing and quality products to insurance,” Mr Balech said.

“We have stripped the complexity out of comprehensive car, home and contents insurance and landlord’s insurance to deliver a straightforward product with exceptional value. We want to bring to the insurance market what we have successfully delivered in our grocery operations – a trusted, high-quality product that delivers everyday competitive prices.”

Honey, which also has partnerships with Bank of Queensland, AGL, Metricon, Harvey Norman and McGrath Real Estate, is underwritten by RACQ Insurance. Its founder and CEO Richard Joffe says partnering with Aldi is a “natural fit given our shared desire to bring a more trustworthy and straightforward insurance product to Australian customers”.

Honey raised $108 million in April and said it aimed to triple revenue, turn profitable and double headcount to more than 200 staff in 18 months.

Aldi says its insurance customers can expect competitive pricing “just like our grocery offer”, with reduced premiums and quotes in three minutes.

“Free from confusing jargon and ‘insurance speak’, Aldi Insurance offers straightforward coverage with no hidden exclusions buried in the fine print ... [and] access to great-value insurance at Aldi’s beloved competitive prices.” 

Aldi also says loyal customers will not be stuck on higher legacy prices.

“Customers getting stung by increasing premiums simply because they didn’t shop around is a trope of traditional insurance. Aldi ’s insurance philosophy, like its grocery offering, is a high-quality product at the best possible price point, for every single customer whether they are a long-term Aldi Insurance customer or brand new,” Mr Balech said.

Last week, Slater and Gordon launched a class action alleging IAG customers were promised false loyalty discounts to encourage renewals. The insurer is also the subject of Federal Court action taken by the Australian Securities and Investments Commission, which IAG is contesting. 

Aldi has almost 600 stores in Australia. Rival supermarket Woolworths, which has more than 1000 stores, offers car, home and landlord insurance issued by Hollard, pet insurance by PetSure, life insurance issued by Swiss Re, and travel insurance issued by Pacific International Insurance and administered by Nib.

Coles, which runs more than 800 supermarkets in Australia, offers car, home and landlord insurance issued by IAL and pet cover by Guild Insurance. It previously sold travel insurance issued by Zurich.

Honey policyholders receive smart sensors to help avoid claims such as fire, water damage and theft, which it says saves up to 8% on their premiums each year. This makes the insurance “more affordable for customers while not compromising on quality”, Mr Balech says.