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Protecting the home front

At a glance

  • Despite the crowded household sector, there are still opportunities for friendly local experts who can provide both guidance and support in the event of a claim

Consumers often value advice when it comes to home insurance, even if some first do their market research on price comparison sites. This is good news for brokers who are able to provide personal service.

Typically, consumers have questions about their valuables, home security or sums insured. The increasingly extreme weather we are experiencing in many parts of the UK is also leading to more queries. Frozen pipes in the winter and outbreaks of flooding are enough to cause any homeowner concern.

Human touch

Many consumers, particularly those under the age of 35, are often keen to gain advice from an expert before purchasing their home insurance. The bancassurers’ share of the household market remains dominant at 31%, according to the UK Personal Insurance Distribution 2011, and this suggests that the majority of consumers are purchasing their building and contents cover at the same time as arranging their mortgage. If more consumers were prepared to shop around for cover, the broker channel could provide potentially cheaper quotes for these customers while still offering valuable expert advice.

There are, of course, some who prefer to consider the whole market before purchasing. According to Datamonitor, on average 34% of consumers use price comparison sites when researching home insurance, but only 2.5% actually use this channel to purchase*. So, while consumers may want to check what’s out there, there is reluctance to buy without speaking to someone knowledgeable.

Opportunity in non-switchers

This is backed up by a separate survey by Confused that revealed nearly 70% of customers have kept the same provider for two years or longer. It also found that 34% of customers have never once switched home insurance providers. The reasons given included that ‘they thought it was too complicated’, ‘they didn’t know they could’ and that ‘they don’t know how to do it’. This all points to there being a significant opportunity out there for brokers to seize!

A quick online transaction suits many motor insurance customers, but the complex nature of household insurance means that customers are less inclined to use aggregators when it comes to insuring their home.

Research by Defaqto has identified the key features that customers look for when selecting their home insurance product. The top five factors given were:

  • Alternative accommodation cover
  • AD cover for Contents
  • NCD discounts
  • Emergency repairs and call-out
  • Guaranteed repairs

The household market continues to present brokers with opportunities to demonstrate their expertise to consumers. Zurich aims to provide brokers with a range of products to cover customers in different circumstances, from standard home insurance to high and even ultra-high net worth cover. Whether it’s a modest one-bedroom flat to a sumptuous castle, we want to provide you with a top quartile product that provides excellent value and a quality claims service.

Zurich have started to re-launch its Home Solutions proposition, enabling it to trade with brokers entirely through Full Cycle Electronic Data Interchange (FCEDI). The new operating model means Zurich is able to offer a broader acceptance criteria and more competitive quotes for the majority customers.

Across the market, insurers have continued to push for volume and since the sector has performed adequately, there have been no steep price hikes like those imposed on the motor market. Zurich questions whether this can be a sustainable strategy, given that the escape of water and flood claims are set to prove enormously costly.

The household sector remains intensely crowded, with direct and bancassurers, along with aggregators, competing with brokers. I am convinced, however, that there remains a place for friendly local experts who can provide both guidance and support in the event of a claim. The household market continues to provide great opportunities for brokers and Zurich will make sure they are able to remain resilient in a dynamic and ever-changing marketplace.

Are you discussing and highlighting these factors with your existing and potential new home insurance customers? For more information, please call your usual Zurich contact.

* The UK Personal Insurance Distribution 2011

Image © Getty

For more information, get in touch

Andy Day | National Personal Lines Development Manager | 07875 886 693

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