This article is the first in a series on how insurers can drive customer engagement by using Property Monitor.
New Zealanders tend to re-evaluate their insurance needs when they change properties or after a poor claims experience (RFi Group, October 2016). 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 Kiwi homeowners in a vulnerable position, especially if disaster strikes in the form of a storm, flood, earthquake or house fire – just to name a few examples. Depending on the policy, 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 cause reputational damage or litigation risk for the insurer. Unfortunately, it is not an unlikely scenario, as it’s estimated that up to 85% of Kiwis could be underinsured.
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 consents for additions and alterations in NZ 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 and listing their property for rent. With Property Monitor, insurers are notified when their customers are rebuilding or extending their home, adding a pool, a deck, a retaining wall or a garage – or any other renovation that requires consent. 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 step amidst the many tasks involved in a renovation.
The Property Monitor database captures key property events, including 1,942 approved consents for alterations & additions on average per month across New Zealand. 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?
The numbers in the above image highlight the opportunity created by renovations alone and are a compelling incentive for insurers to ensure that their customers have proper cover protection in place by updating their property insurance.
Further, with the number of for sale listings still limited and the cost of trading up to a bigger house significant, renovating their existing property may seem like a good option for many homeowners. Of course a spike in renovation rates would further exacerbating the risk of under insurance that Property Monitor can help combat.
How does Property Monitor work?
Triggers and alerts set up on new development applications are sent to you via secure file transfer, allowing you to track any changes to your customers’ circumstances. 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 renovations, triggers can also be set up on selling, buying and renting and on anniversary of the settlement of sale, 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.