Missed Sales Opportunities Among Property Buyers
By failing to offer insurance to their customers, mortgage managers and brokers may be missing an important business opportunity.
According to a 2012 survey performed by CoreData for The Commonwealth Bank and The Mortgage and Finance Association of Australia (MFAA) Home Finance Index, brokers should be cross-selling insurance products to their loan customers on a regular basis. CoreData questioned 1,447 Australians, asking if they had been offered insurance products as part of the mortgage process. It reported that 42.9% had been offered home insurance, 47% had been offered loan protection insurance and 31.5% had been offered life insurance.
The survey gives good reason for brokers to make those offers more often. Conversion rates were especially significant: 36% for home insurance, 29.7% for loan protection and 18.4% for life insurance. First time buyers were the group most apt to be interested in all three kinds of coverage, while almost 20% of other buyers were interested in purchasing loan protection.
According to MFAA CEO Phil Naylor, the results show that there is a wide range of customers who are interested in purchasing insurance. "The survey shows that mortgage brokers have a great opportunity to cross-sell insurance products, with both young and mature borrowers showing they are open to opportunities to protect themselves,” he said. Naylor noted that many MFAA members had already seized the cross-selling opportunity. “I encourage more companies to investigate this area of growth,” he said.
The CoreData survey also investigated respondents’ approach to real estate in superannuation funds. More than half of respondents with self-managed funds indicated that they had not yet invested in property, but 11.4% of them evinced an interest in making that kind of investment within the next year. That percentage is almost double the number that the survey found one year ago.
Renewed interest in property investment reflects an increase in buyers’ level of optimism. The survey found that 51.7% of home buyers think that this is a good time to purchase a home. This result was in marked contrast to the 38.8% who expressed that belief six months ago.
Despite continuing economic uncertainty, lower home prices and low interest rates have bolstered consumer sentiment. "The renewed focus on property investment shows that people now see the sector as a viable alternative to shares and managed funds, providing a stronger yield than was possible in recent years,” Naylor said.