How To Change Home Insurance

Transcription

1 2016 Ratings roundtable meetings Home Insurance Session I Hosted by Angela Pilley and Anna-Marie Duthie Insight Analysts (General Insurance) Purpose Outline and discuss the key issues impacting the 2016 Ratings Get your feedback in order to finalise the criteria outlined in the discussion paper(s) 1

2 Agenda About Defaqto Ratings Key developments and trends Outline and discuss key issues Additional Q&A Next steps in the About Defaqto Ratings Outcomes Outcomes Better financial decisions Simplify decision making Based on a promise Process Process Open and transparent methodology Relevant Stringent and consistent Values Values 100% independent Rate propositions not providers Rate all propositions in any given market 2

3 Key developments and trends Increase in HNW home insurance provider numbers - Total distributor numbers have increased by some 45% over the period, with 44 distributor brands today compared to 27 in of the distributors in 2010 no longer sell HNW home insurance as at July of the distributor brands in 2015 did not exist in Increase in landlord home insurance provider numbers - Total distributor numbers over the period indicate that this is a growing market, with 82 distributor brands today compared to 73 in of the distributors in 2010 no longer sell Landlord Home insurance as at of the distributor brands in 2015 did not exist in 2010 HNW Home Insurance Context Expand on the way in which we currently review Extended Replacement cover Consider Fine Art in addition to the existing Valuables Extended Replacement feature Additional criteria detailing the basis on which the extended replacement limit is calculated for both Fine Art and Valuables Key points for discussion Do you agree that this is a fairer way of scoring these elements of cover? 3

4 Key developments and trends HNW Home Insurance - Automatic increases (extended replacement limits) for Fine Art and Valuables HNW Home Insurance Context Changes to Star Rating Criteria We are proposing to amend the following criteria: - Matching Items cover - Escape of Water Excess We are proposing to introduce the following criteria: - Combined Excess - 24 hour claims helpline We are proposing to remove the following criteria: - Legal Expenses Excess We are proposing to amend the DNA Structure for criteria: Fine Art and Antiques Cover Death of Artist Increase & Death of Artist Maximum limit Trace and Access outside the home Fixtures Temporarily removed New Fixtures & New Acquisitions Student Belongings Outdoor Items Sum Insured Key points for discussion Are there any potential issues with the proposed changes? 4

5 Landlord Home Insurance Context Review DNA structure for all criteria Reflect on the cover and limits, rather than the availability of cove Amend the DNA structure for buildings sum insured protection to reflect the increase in the minimum sum insured available across the market We are also proposing to remove features which reflect the availability of cover and focus on the limit given. This impacts the following Star Rating Criteria - Removal of Nests - Rent Guarantee - Repairs Guaranteed Key points for discussion Are we taking the right approach is the availability of cover simply a price issue? Landlords Home Insurance Minimum Buildings Sum Insured - Increase in the number of providers offering a minimum sum insured of 500,000 or more 5

6 Key developments and trends No major change in home insurance provider numbers - Total distributor numbers over the period have reduced slightly, with 164 distributor brands today compared to 173 in of the distributors in 2010 are no longer selling home insurance as at of the distributor brands in 2015 did not exist in 2010 Higher Value Home Insurance - 15% of providers market a product as MNW or Higher Value - This figure would increase to just under a quarter of providers should criteria be set to establish the target market - MNW products currently account for 13% of all Standard Contents 5 Star Ratings and 9% of Standard Buildings 5 Star ratings Home Insurance Context Increase the Contents Assumed Sum Insured to reflect the average minimum level of cover available Cover levels reflected as a % of the sum insured will be impacted. The Star Rating Criteria affected are: Valuables Inner Limit Single Item Limit Valuables Single Item limit Theft from Outbuildings Alternative Accommodation Temporary Removal Student Belongings Special Events Increase Business Equipment Cover Key points for discussion Do you agree that the proposed increase is reflective of the market? If not why not? Will we continue to see a decline in the number of sum insured contracts? 6

7 Home Insurance - Contents Assumed sum insured - Increase in number of providers offering a minimum sum insured of 50,000 Minimum Sum Insured (Contents) (% of products) 37% 41% 48% 50% 52% 55% 50,000 or more Home Insurance Context Changes to Star Rating Criteria We are proposing to amend the following criteria: - TV and Video Accidental Damage - Repairs Guarantee We are proposing to introduce the following criteria: - Combined Excess - 24 hour claims helpline We are proposing to amend the DNA Structure for : Alternative Accommodation (Contents) Minimum Excess for both buildings and contents Key points for discussion Will we see Technology and Home Entertainment expand further to cover the connected home? Will product development continue in the same way i.e. products becoming more modular or will providers move towards multiple offerings i.e. Bronze, Silver and Gold? 7

8 Home Insurance Buildings and Contents Minimum Excesses - The minimum available excess has increased from less than 60 in 2010 to 100 or more in 2015 Availability of Add-on s Context Availability of multiple cover levels We are proposing to consider the maximum level of cover and perils available for both Home Emergency Cover and Legal Expenses Insurance This includes Home, HNW Home and Landlords Home Key points for discussion Ban of opt out sales process - has this already impacted the sale of add-on cover? What effect will this have on product development? Will price comparison sites play a major role in the distribution of add-ons? 8

9 Additional Q&A Home Insurance - Session II Context Home Insurance add-ons Implications for 2016 Key points for consideration Review of home insurance add-ons What is your definition of an add-on? How will add-ons affect product development? How can Defaqto Star Ratings help to reassure consumers buying add-on products? 9

10 Thank you 10

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