Industry newcomer Honey Insurance is using property data, tech and a fresh approach to turn the home insurance industry on its head.
Honey Insurance is looking at the market in a completely new way, and it’s out to address some of the traditional pain points of home insurance. As Joel Tow, VP of Engineering at Honey Insurance explains, “The home insurance market, the industry and the experience hasn’t really changed in years. You fill in a long form with loads of questions in it, it takes longer than it should and is painful.”
“We’re trying to create what we think the experience should be, focusing on making home insurance faster and easier, and ensuring customers have cover that fits their needs. Consumers are now used to exceptional digital experiences, and there’s such rich data available to us now that they deserve better when purchasing home insurance.”
Taking the cognitive load off customers
A key factor turning Honey’s commitment to outstanding customer experience into a reality, is its use of CoreLogic’s extensive property data. Honey is taking the onus of providing information about a property off the customer, thereby creating a faster, simpler application process.
“In order to get a policy, we need to know about the house we’re insuring – the cost to rebuild and the cost of contents,” says Joel. “We integrate with data sources and services that assist in this process, then surface that data so that the customer can confirm it, customise it, tailor it, and make sure they have the cover that’s right for them, quickly and simply.”
By using property data this way, Honey is transforming the home insurance process, meeting customers’ needs faster and with less hassle, while still ensuring properties are appropriately covered and premiums are fairly priced.
Addressing underinsurance
Accurate and innovative property data integrated via API into the application process delivers other important benefits. Most notably, it helps Honey’s customers avoid the widespread problem of not being adequately insured.
As Joel points out, one of the biggest risks home owners can face is underinsurance. In fact, regulator ASIC found up to 80% of Australian households could be underinsured1. The problem comes about when insurance companies ask home owners to provide their own indication of how much they think it would cost them to rebuild their house. Consumers may not have a good understanding of all the components that go into rebuilding a house. They might also not be aware that building codes, construction methodologies and standard materials change over time – all impacting the cost to rebuild. If not taken into account, this could leave home owners out of pocket if the worst was to happen.
“Most people underestimate,” says Joel. “Lots of costs aren’t obvious, resulting in people being underinsured. It’s a tragedy, and one that can be avoided.”
Why CoreLogic property data?
Joel says the team at Honey Insurance evaluated a number of data sources and expertise around homes, and they chose to use CoreLogic from the start.
“We knew from the outset that information about the properties we’d be insuring would be critical to the experience we wanted to offer.”
Joel explains that in his opinion “CoreLogic offers the best coverage for property data – and the most accurate data, available in Australia.”
“They also have the experience in the market, knowing what it costs to rebuild. This rich data set and expertise is something we rely on to create the customer experience we believe people deserve when they sign up for insurance.”
Clarity of coverage
Honey may be a newcomer, having launched in early 2021,but it’s certainly shaking up the industry.
According to Joel, “It’s all in that customer experience. Customers can be covered in as little as three minutes rather than 30, thanks to key information CoreLogic provides about the home– its size, year of construction, building materials, and the estimated cost to rebuild – being integrated into the application process.”
In fact, Joel says that already, “over 90%” of Honey’s home policies have directly benefited from CoreLogic data.”
Honey’s approach clearly resonates with Australian home owners. “We have some great reviews, and the comments are all about how much easier the process is, and how much more confident our customers are with the clarity of their coverage,” Joel says, “In the large part, it’s the expertise and the data we get from CoreLogic that creates this experience.”
“We benefit significantly from working with CoreLogic, we couldn’t offer the experience we do otherwise.”
A great buzz for the future
Joel notes that “Insurance is about pricing risk, so as you protect your home, your risk goes down.” Here too Honey is taking a different approach to enhance the experience for customers.
“Honey is the first in Australia to offer smart tech as an integrated part of our policies,” Joel explains. Honey’s customers receive smart home sensors that can alert home owners to some of the most common, and often avoidable, mishaps like fire, water damage and break-ins.” According to Honey, the sensors can also deliver valuable savings – with discounts on cover of 8% annually for customers who use the sensors.
And the wealth of initiatives Honey has already introduced to the market is only the beginning. Joel says, “We’re just scratching the surface. A lot about this industry needs to change. We’re constantly looking for ways to make insurance easier, faster, and simpler. I think there’s a lot more we can do to protect Australian homes.”
1https://asic.gov.au/about-asic/news-centre/find-a-media-release/2016-releases/16-053mr-asic-calls-for-further-improvements-from-home-insurers/
Disclaimer: This case study describes the opinions and experiences of Honey Insurance and is based solely on interviews with and material received from Honey Insurance’s representatives. The information is of general nature and should not be construed as specific advice or relied upon in lieu of appropriate professional advice. While CoreLogic uses commercially reasonable efforts to ensure the provided information is current, CoreLogic does not warrant the accuracy, currency or completeness of the information and to the full extent permitted by law excludes all loss or damage howsoever arising (including through negligence) in connection with the case study.
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