Independent financial research company Defaqto has found that the number of products and providers in the home insurance sector has increased significantly since 2008. At the same time, Defaqto has also identified that the vast majority of consumers are comfortable with researching and buying home insurance online without professional advice.
This has created a significant challenge for home insurance providers: how do they make their products stand out from the competition in a crowded marketplace when they have less opportunity to interact with consumers directly?
Defaqto research has found that the number of home insurance products – across standard buildings and contents cover - available to consumers as well as the number of providers operating in this sector has seen marked growth in the last three years:
Buildings insurance
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Since 2008, there has been a 19% growth in the number of standard buildings insurance policies available, from 226 three years ago to 270 this year
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The number of providers offering these products has grown from 152 to 179 in the same period - an increase of 18%
Home contents insurance
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There has been a 15% growth in the number of policies over the last three years, from 240 in 2008 to 276 currently
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Over the same period, the number of providers in this area has increased by 11% - from 161 to 179
In addition, a Defaqto survey of 2,500 consumers who are actively engaged in financial decision-making found that 85% of people are comfortable with purchasing home insurance online. This demonstrates that people are confident when it comes to navigating these financial products – and, significantly, are more comfortable about making purchasing decisions without seeking advice from a professional source, such as a product provider or an intermediary.
Given these dual pressures, home insurance providers are faced with three key challenges:
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Keeping on top of what competitors are doing, and being aware of new launches or product changes as soon as they happen
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Being able to respond quickly to take advantage of opportunities or to counter threats
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Identifying how to make their home insurance offering stand out from the competition and how they can cut through the noise of competing products to reach target consumers
As a result of these challenges, access to robust competitor intelligence is becoming increasingly important for providers within the general insurance sector to support the analysis required to develop and maintain competitive products.
Defaqto has launched a new web-based product research application – Defaqto Matrix – that provides firms with independent, whole of market competitor and market intelligence on the general insurance sector.
This will help providers understand where their products sit in relation to competitors’, what features their products need to have in order to stand out and how to position them for maximum impact. The application’s key features include:
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Reports on product changes – enabling firms to see at a glance what new products have been launched or whether any features have changed in competitors’ products
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Access to historical product data – allowing providers to assess how a particular sector or product type has changed over time
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The ability to compare the features of one product against another – facilitating analysis of a product’s key strengths or weaknesses in relation to a competitor’s
Brian Brown, Defaqto’s Head of Consulting, said:
“Providers in the general insurance sector are facing a number of significant challenges, including rapidly changing and crowded product markets. These challenges are exacerbated by consumers’ increasing comfort with buying general insurance products online, meaning that there are fewer opportunities for firms to have direct contact with their target market. Insurers need to stay ahead of the competition to capture and retain market share. However, there are significant challenges involved in putting the right type of product together.
“Competitor intelligence is central to success within a rapidly changing market – knowing what’s changed as soon as it happens, being able to respond quickly and understanding how to communicate a product’s USP to really hit home with target consumers. Technology as an enabler to this process is becoming increasing critical. Defaqto Matrix provides access to independent, accurate and comprehensive financial product data. It is a key enabler to help firms stand out from their competitors and grasp opportunities head on.”
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