The UK banks says planned growth from 1.4 million to two million policies will be achieved particularly within motor insurance, predicted to grow by over 150%, creditor insurance, expected to increase by over 50%, and home contents insurance, predicted to increase by over 30%.

Abbey says it will withdraw from general underwriting off its own bat and instead use a panel of competing insurers to provide a wider choice of products and more competitive pricing. The bank says partnerships with Norwich Union and Capita Eastgate will help it to improve service standards through process re-engineering, systems development and external claims handling expertise. Abbey is also to introduce a full service on the Internet for all insurance products - including quotes, applications, policy processing, policy alterations and claims handling.

Under the new IT arrangements, all policy administration and claims settlement will be outsourced to Capita Eastgate. The support will also extend to the management and development of IT systems for all general insurance business, using Capita's 'Consumer Direct' platform, jointly developed with Cap Gemini Ernst and Young.

Under the terms of the deal, Abbey National claims handling staff based in Bradford will transfer to Capita Eastgate and Norwich Union. Staff in Liverpool and Bradford responsible for customer service will also transfer to Capita Eastgate. The banks says that staff based in customer service in Milton Keynes will be re-deployed as far as possible within the group.

Once the new arrangements are in place, customers will be able to deal with the bank in a variety of ways, including branches, telephone, Internet, or through mortgage introducers. Abbey says it is planning to spend £50 million over the next 36 months to deliver a single systems platform with new products and multi-channel access.