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3 Ways to Drive New Business in a Slow Real Estate Market

One-third of consumers don’t recognize they need to inform their insurance company about a renovation—how can agents help?
Sponsored by The Hanover Insurance Group
three ways to drive new business in a slow real estate market

Today's housing market impacts buyers and sellers, and independent insurance agents are also likely feeling the effects. What was once a strong lead source for agents may now be generating less new business in a slower market. But even with fewer real estate transactions occurring, there are still opportunities for agents to earn new business and help existing customers ensure they are properly protecting their assets.

To better understand how the current real estate market is changing the way consumers look at homebuying and renovations, The Hanover partnered with The Harris Poll to conduct a survey on consumer sentiment. The Hanover's Home Buying and Renovation Report indicates higher home prices have caused some consumers to stay put longer, and renovation activity remains high, which increases home values and serves as conversation starters for insurance agents and customers.

After analyzing the data, there are strategic actions agents can take to continue to drive new business while supporting existing customers to manage their risk exposures.

1) Higher home and interest costs are slowing home purchases. Sixty-nine percent of respondents looking to purchase a home in 2022 were impacted by higher home prices and interest rates. Twenty-eight percent of the respondents looking to purchase a home in 2022 decided to stay in their current living situation; this could impact agents who leverage home moving events as a source of lead business generation.

Of those who planned to purchase a home in 2022, only 9% of respondents with incomes over $100,000 opted to rent instead, compared to 21% of respondents with incomes under $100,000.

Agent Impact: Fewer home transactions generate fewer leads for independent agents. Agents should diversify their lead sources to minimize the negative impacts of a slower housing market. Targeting higher-value home leads, which appear less impacted by home market trends, are also an opportunity for agents.

2) Despite higher material costs, renovations aren't slowing down. Sixty-one percent of U.S. homeowners are planning renovations to their homes in 2023, with one in four (25%) planning major renovations. Forty-one percent of U.S. homeowners planning renovations expect to spend over $50,000 and more than half of those respondents have a household income over $100,000. Millennials were impacted most by the housing market and are more likely to make renovations over the next 12 months.

Agent Impact: When renovations are done, it changes the value of the home—including the cost to rebuild it in case of a loss. With homeowners still planning large amounts of renovations, the chances of a customer needing a coverage update continue to be high. Agents should incorporate proactive outreach into their strategy to help uncover renovations and keep coverage updated.

3) One-third of consumers don't recognize they need to inform their insurance company about a renovation. One-third of U.S. homeowners planning major renovations in the next year (34%) do not plan to or do not know they need to tell their insurance company or agent. This is an 8% increase from last year, highlighting an opportunity for independent agents to proactively reach out to clients to educate them on the importance of updated coverage in case of a claim.

Agent Impact: Independent agents should regularly educate customers on when to contact them, such as for life events like moving, buying a car, or making renovations. This can be done through digital channels like social or email as well as during customer conversations. Proactive outreach throughout the year also results in powerful conversations that give customers peace of mind that their agents are continuously looking for ways to protect investments and add value to the relationship.

These trends can be used as conversation starters with customers and prospects to help create a strong customer experience that reminds customers of the value their agent provides. Independent insurance agents that take the time to help homeowners determine the necessary protection to cover damage to their home's structure, as well as advise on overall home risk, will likely be viewed as a trusted resource and see success.

Daniel Halsey is president, personal lines, The Hanover.

3 Ways to Drive New Business in a Slow Real Estate Market

17074
Monday, March 27, 2023
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