Do you want insurance with that?

"The market currently offers more products than customers and distributors can digest" Each year more insurance products are being developed. These new insurance products are being sold through diverse channels and are increasingly coming from newly created bespoke brands or as ancillary products distributed via traditional well know brands. The business logic is clear. With challenging economic conditions, there is a battle for companies to drive more revenue and offering insurance is seen as a lucrative category where the value of their existing distribution capabilities can be leveraged creating new revenue. This has led to us now having supermarkets offering landlord insurance. Into the fray is stepping realestate business Domain with its recently announced Domain Insure insurance offering.

So what do customers typically consider when buying insurance*?

The Insurance Council of Australia submissions to the Federal Governments enquiry into Insurance found that when buying Car Insurance, the top three consumer considerations where:

1: The price of the premium - 52%
2: Value for money - 41%
3: What's covered / not covered in the policy - 31%

So if those are the three key considerations that customers use to make their purchasing decisions, then maybe new non-traditional insurance brands can create viable models that deliver value for customers and for themselves. What we are seeing is a period or rapid experimentation and iteration. Where companies are trying various insurance lines and sticking with the ones that work. Coles, for example, has stopped selling Life Insurance, whilst retaining its Coles Car, Home & Contents and Landlord Insurance lines.

So what would encourage Customers to try these new entrants? Is it purely price driven? Or does the connection between the brand and the insurance line need to make sense eg Domain selling home insurance. Either way, one thing we can be sure of is that whilst it is desirable for a simpler, more transparent insurance market, the future seems to becoming more fragmented and complex.   

Source: Insurance Council of Australia, Top 3 Policy drivers by Product, http://www.insurancecouncil.com.au/submissions#2017Feb