This article is the first in a series on how insurers can drive customer engagement using Property Monitor.
Australians tend to re-evaluate their insurance needs when they change properties or after a poor claim experience (RFi Group, Insurance Industry Report - TAS - October 2017). With insurance typically being a grudge purchase, once a property owner has chosen a provider it’s unlikely that they’ll revisit their sum insured amount, even if their circumstances change or they improve their property. This can leave Aussie homeowners in a vulnerable position, especially if disaster strikes in the form of a storm, flood, bushfire, earthquake or house fire – just to name a few examples. If the cost to rebuild a property is higher than the sum insured amount, owners will be out of pocket when they need to make a claim. This situation will exacerbate their loss and trauma – and may lead to reputational damage or litigation risk for the insurer. Unfortunately, it is not an unlikely scenario, as an estimated 4 out of 5 Australians are currently under insured.
So how can insurers identify and solve for this problem?
By recognising – and acting - on key drivers that cause rebuild costs to change, insurers can mitigate against this risk. Renovation is one such driver, and with renovations in Australia at a peak, this is more relevant than ever.
Property Monitor, a service offered by CoreLogic, helps insurers identify customers who are currently embarking on home renovations, are buying, selling or listing their property for rent, or who have reached the anniversary of their settlement of sale. With Property Monitor, insurers are notified when their customers are rebuilding or extending their home, adding a pool, a shed or a garage – or any other renovation that requires DA approval. Armed with this information, insurers can then proactively engage with their customers and encourage them to revisit their sum-insured amount. This takes the onus to inform the insurer off the homeowner, who may overlook this crucial task amidst the many steps involved in a renovation.
The Property Monitor database captures key property events, including 14,200 approved Development Applications on average per month across Australia. By flagging customers’ intents to improve their property, Property Monitor helps insurers reach out to them with relevant content and cover options, ensuring maximum cut-through. By reaching out at the start of their renovations, insurers can also protect customers who may unwittingly void their home insurance policy.
This highly targeted messaging helps insurers make sure their customers’ needs are being met and their cover amount is up to date. Talking to customers at a time when they’re most receptive to their messaging can increase NPS and opportunities for conversion, potentially resulting in higher marketing ROI.
So what type of information does Property Monitor provide, and how does this help insurers?
According to the Australian Bureau of Statistics in the first eight months of 2020, there has been 113,635 applications across Australia with approved DAs. The total cost of alterations and additions that did not create new dwellings is $5.53 billion – up from $5.46 billion in the same period of 2019.
In addition to the five most popular types of renovations shown above, there were also renovations consisting of smaller items, such as pergolas/patios, garages and sheds (valued up to $296,363) as well as the larger items like multi-dwellings and duplexes (valued up to $2.35 million).
These numbers alone are a compelling incentive for insurers to ensure that their customers have proper cover protection in place by updating their property insurance. But if that’s not enough motivation for outreach, 56% of the development applications are located in areas that have been affected by recent natural disasters, such as the February 2020 East Coast storms and flooding, the January hailstorms (which affected VIC, ACT, NSW and QLD), and the 2019/20 catastrophic bushfires. These events generated 263,577 claims and $4.84 billion in damage.
Further, in light of COVID-19, the Federal Government’s grant of $25,000 to help homeowners renovate or build new homes should also encourage a spike in renovation rates, further exacerbating the risk of under insurance that Property Monitor can help combat.
How does Property Monitor work?
Triggers and alerts are set up via API on new development applications, allowing you to track any changes to your customers’ circumstances. Alternatively, they can be sent via secure file transfer. You can be notified of triggers as frequently as every 24 hours, or on a monthly basis – it’s up to you.
The insights gained can then be used to inform your marketing strategy and help with key decisions around segmentation, messaging and channel.
Beyond renovation, triggers can also be set up on selling, buying and renting, enabling you to engage your customers at the time of key events where they may be re-evaluating insurance providers. With the right engagement strategy, Property Monitor may also help reduce churn, increase retention rates and increase the lifetime value of a customer.