Fairfax Media’s Domain will start selling home, car and landlord insurance to users of its website and apps, as it eyes a slice of a $2 billion-a-year market from distributing cover to consumers.
As part of its plan to collect revenue from the many transactions involved in property sales and rentals, Domain will on Friday announce it will use its digital assets to offer policies under the brand Domain Insure.
Domain will not carry the actual underwriting risk, with Hollard Insurance likely to be key partner. Fairfax Media is the publisher of the Sydney Morning Herald and The Age.
Instead, it plans to collect commissions on the insurance sold, following its move into other “adjacent” businesses including mortgage broking.
The business is a partnership with Envest, a private investment company specialising in financial services, with Domain holding a 70 per cent stake in the new venture.
The move into insurance comes as Fairfax is looking to spin off Domain in an ASX listing in November, with the parent company to retain a 60 per cent stake. Fairfax on Thursday provided a trading update showing revenue was down 4 to 5 per cent across the business compared with a year ago, ahead of the expected release of scheme documents on the Domain separation on Friday.
The insurance venture aims to take advantage of the extensive data Domain holds on its customers and their properties, which can be used to tailor insurance quotes to users.
Domain chief executive Antony Catalano said the data would allow it to provide an insurance quote in fewer steps, and any savings could be fed back into more competitive pricing.
Users on Domain’s site or apps were two to three times more likely to need new insurance than the general public, he said.
“What we’re offering them is something that comes with the transaction that they are making,” he said.
Moving house can also be a trigger for consumers to change their car insurance, because customers must update their address with their car insurer.
Domain is planning a soft launch of the insurance business late this year, before it becomes fully operational in early 2018.
It is part of a wider plan to tap into the many purchases and decisions consumers make when moving house, including obtaining finance and insurance, connecting utilities, arranging removalists, redirecting their mail or buying furniture.
“There’s a range of things to do, so if you can make that process easier, consumers will embrace it,” Mr Catalano said.
Insurance commissions are worth about $2 billion a year, and Mr Catalano said Domain Insure was aiming for a 1.5 per cent share of the home and contents insurance market within five years.