Insurers should be more like the US home insurance market and start offering products tailored to the specific needs of their clients, the Australian Financial Review has argued.
House insurance is an industry in flux with changes in consumer preferences and the need to meet rising demand for the product, said the paper’s editorial board.
The article points out that the number of house insurance policies sold in Australia has fallen from an annual average of 13,000 in 2013 to 6,500 in 2017, with a rise in demand driven by new house construction and rising house prices.
With a $7,500 deductible, it would be a good time to rethink how you offer insurance to people in your area, the article argues.
“It would also be a great time to look at the Australian insurance market in a more holistic way, where there are multiple types of policies available and how they work and compare them to each other,” it says.
What does the article say?
“House insurance in Australia needs to adapt to the changing needs of the Australian consumer.
Insurance products should be tailored to meet the needs of different people in the market and the best way to do that is by offering the right product at the right price.”
The Insurance Council of Australia has called for the industry to diversify its product offerings, with insurance products tailored specifically to meet needs of older Australians, young people and the disabled.
In the meantime, it is recommended that the industry focus on two key areas of the market: housing, and house repairs.
It also suggests insurers should consider a “diversification” of products for older Australians who have trouble getting insurance coverage.
For people over 65, it says the industry should offer more comprehensive coverage to cover medical costs and the repair of existing houses.
And for those aged between 55 and 64, it suggests insurance should cover repairs to older homes or for those with a disability, as well as providing an insurance rebate.
Insurers should also consider offering more comprehensive cover for younger Australians, particularly those with disabilities, and should consider offering a lower deductible, said insurance industry analyst Mark Rainsford.
We need to diversified the market to make sure we’re offering the best product for older and younger Australians.
“”There’s a huge gap in the product available.
The industry needs some of those products in its portfolio,” he said.
Rainsford said insurers had already been investing in the development of new products, including a new insurance platform for elderly people.
If the industry was focused on younger Australians who had problems getting coverage, it could start to focus on offering more affordable coverage to those who need it.”
We’ve got a number of different options out there, but if we’re focusing on older Australians and young people, then that would be one that would work,” he told the newspaper.
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