Mortgage lenders, brokers are underused channels: QBE
Insurance providers can grow their business by selling more products through banks and mortgage brokers when properties are bought, according to QBE Lenders’ Mortgage Insurance CEO Jenny Boddington.
“There’s an opportunity more widely in the finance community to get involved in general insurance,” she said last week at the launch of this year’s QBE Barometer survey. “It’s a great opportunity for [mortgage] brokers to have that conversation, it’s another revenue stream for them… Many people don’t know that their banks do insurance either.”
Selling via mortgage brokers presents a particular opening for insurance providers, the survey of 1014 people conducted by GfK Australia shows.
“However, they will need to overcome the key barriers: competitive pricing, [consumers] wanting to keep banking and insurance separate, and the perception that mortgage institutions are not experts in insurance,” the report says.
About 73% of mortgages are with the big four banks, but about two-thirds of consumers buy both home and contents cover through insurance companies. Only 31% of people with mortgages are offered building or contents cover by their financial institutions.
Of customers at big banks, only 36% recall being offered insurance when taking out a loan, compared with 7% of those using mortgage brokers, the survey shows.
The rate of mortgage repayment protection insurance is low, with only 23% of respondents covered, down from 27% last year. “This drops to only 18% of those who have struggled with mortgage payments in the past 12 months,” the report says.
Banks are the preferred option for mortgage repayment protection insurance.
Only one-third of people surveyed would consider obtaining building and contents insurance through a bank and 15% would consider doing so through a mortgage broker.
About one-third think insurance pricing at banks and other institutions is uncompetitive, and 26% like to keep their insurance and banking separate.
The survey shows 14.5% of people intend to buy property in the next year, almost the same as last year (14.8%) and up on 2013 (13.2%).
Low interest rates are fuelling higher demand, the report says.