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Proptech and insurtech: neighbours with a common view

Handing proptechs the keys to a new revenue stream

Insurtechs specialise in bringing together consumer demand and insurance cover wherever gaps in the market exist. One such gap is right in front of your eyes, if you click over to any property website temporarily. Is there a property-related insurance offering on it? If not, there’s the gap. 

Along with fintech, wealthtech, insurtech and all the other techs, “proptech” is growing fast. The term simply refers to any technology that supports the buying, selling, renting or other aspect of the property sector – from websites where homes are bought and sold to apps for home automation. Like insurtechs, the quest of proptechs is to bring demand and solution closer together, digitally.

A significant demand in the property sector is for insurance. All homeowners need a degree of insurance cover – home loan providers make it mandatory and besides, who would want to undertake the biggest purchase of their life – buying a house – without safeguarding it through insurance? Nearly everyone wants some sort of cover for their household contents, too, whether they rent or own.

The old way of doing things

Traditionally,  the big banks have provided insurance in the property sector, especially at the end of the homebuying journey: A family starts by browsing for properties. When they find the house they want, they contact a home loan broker to negotiate with the banks, on their behalf, for home loan quotes. They go with Bank X, thanks to its decent interest rate offer compared to the rest. Bank X also offers them insurance cover, to be tied into the loan. The family accepts; they have too much else to take care of, to shop around. But what if someone had offered them an easy and attractive insurance offering further back in their journey?

The new way of doing things


There is nothing to stop proptechs from offering different types of insurance cover on their home pages, thanks to today’s easy-to-integrate insurtech SaaS (software that can digitise the insurance value chain from beginning to end).

Many proptechs earn little revenue from their users, being primarily a platform across which deals are forged between buyers and sellers, or landlords and tenants. Insurtechs are on a mission to change that, by empowering proptechs to offer their customers Value Added Services, and generate new revenue for themselves, through digitally embedded insurance products on their platforms. Some examples:

  • Property websites can offer homebuyers cover that will meet various insurance requirements.
  • Home loan brokers can do the same; there’s no need to leave it all to the banks later in the day.
  • In the rental sector, property marketplace portals can offer insurance to protect landlords financially in the event of property damage or rental payment shortfalls – around two-thirds of landlords experience issues with rental shortfalls; a problem exacerbated by the economic fall-out from Covid-19.
  • For tenants, renter’s insurance  can provide protection against break-ins, damage to neighbouring properties, or visitors’ injuries. 

Types of companies that can offer embedded insurance:

Websites for selling, buying or renting properties

Home loan broker portals or websites

Estate agent websites

Commercial property management platforms

Vendors selling  products for the property sector that might require cover – like solar energy; security; automation or irrigation systems (read about digital warranties for OEMs)

Choosing the right enablers for your digitally embedded offering

A proptech would need two partners to move ahead: a risk carrier to underwrite the insurance and handle compliance, and a technology partner to implement the insurance offer.

Where necessary, we can broker an introduction between the proptech and suitable insurance license carriers. Together, the proptech and license carrier/underwriter would decide the nature and fundamentals of the insurance offering(s) they wish to launch.

Then, it’s important to bring on board a technology partner that understands not just the software involved, but the dynamics of the wider insurance industry. Click2Sure has close ties with leading players in the insurance space and has been focused on digital solutions for this sector for several years.

With our proven software, our UX and UI teams can embed a new Value Added Service or short term insurance cover product on a proptech partner’s website, mobisite or app within 30 days; allow for a phase of Acceptance Testing and a pilot phase, and then launch the offering within five months of starting the insurance offering’s design. 

Some proptechs want to offer a single insurance product underwritten by one risk carrier, while others want to have several products supported by several risk carriers. That’s up to the proptech and the underwriter.

We implement an omnichannel approach for our clients to distribute the resulting offering: on their website, mobisite or app but also via WhatsApp, SMS and other digital touch points. The more visible and accessible an insurance offering is, the higher the take-up is likely to be.

After the launch: growth opportunities

Our software is endlessly scalable, meaning that once the initial offering is live on a proptech’s platform, we can add new types of cover on request, and briskly. Who knows; in the near-future homeowners may want cover against damage from drones, flying taxis or satellite debris.

Policy holders can be surveyed, or cross-sold/upsold further offerings, via the Customer Portal we create for them to manage their original policy. Because it’s a two-way communication channel, think of the Customer Portal as an ongoing direct marketing opportunity for the proptech.

The proptech has clear oversight on all policyholders, and can handle a lot of the insurance administration work, which would normally be outsourced to the risk carrier, in-house. Automation, wherever possible, makes it easy to do.

Because our solution is cloud SaaS, there’s no capex outlay required; proptechs pay only for the implementation of the embedded insurance offering, and then a monthly subscription fee. 

If you’re a proptech looking to roll out an insurance offering digitally – and all you’ve been looking for is the technology partner to embed it into your platform – we can have an MVP wrapped up and under your Christmas tree in a few short weeks. Contact the team here: https://click2sure.co.za/contact-us/

Sources:

https://www.investopedia.com/insurance/homeowners-insurance-guide/
https://www.qover.com/case-studies/casestudy-immoweb
https://www.privateproperty.co.za/advice/property/articles/what-homeowners-need-to-know-about-insurance/5375
https://www.nerdwallet.com/article/insurance/understanding-homeowners-insurance