Lloyds denied this is a direct challenge to intermediated sales, with a spokesperson for Lloyds adding the plans are a part of Lloyds multi-distribution channel.

“Our multi-distribution strategy, which includes both intermediaries and branches, means that we can quickly develop products and services in this area according to customer needs. The approach gives a greater choice to customers.”

The spokesperson added: “This doesn’t mean we’ll do less through the intermediated channel.”

Another Lloyds spokesperson said the Group expects the Retail Distribution Review (RDR) to create n advice gap as advisers target “more upmarket” customers.

“It’s more straightforward for us to channel business into branches. We have 30m customers and we reckon 17m would be good bancassurance customers. So far we only have 2m customers and we need to add another 1m by 2014,” he said.

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“That’s a 50% increase in customers and a 100% increase in sales.”

In its strategic review, LBG said that it plans to double sales and profits from its bancassurance proposition within the next three years.

It said it seeks to take advantage of an “advice and distribution gap” it believes will develop as a result of the Retail Distribution Review (RDR).

António Horta-Osório, group chief executive for Lloyds told the BBC that that he believes some 17m of its customers are “eligible” to purchase insurance, so Lloyds will do all it can to persuade them to do so.