In the current competitive home insurance market where consumers are tempted by price over policy features, banks will be able to take advantage of their ability to cross-sell to existing customers, according to a leading financial research company.

A market report by Defaqto revealed that marketing for home insurance products continues to be focused on price rather than on service or product features, making it even more difficult for the public to make an informed purchasing decision.

The report identifies 115 companies selling home insurance under their own brand, in addition to intermediaries selling other insurers' policies and claims that the majority take the 'price is everything' approach to selling.

"This is a tough market where success will require insurers to increasingly tailor their products to meet customer needs. Looking ahead, it is likely that the banks will be the big winners with their ability to cross-sell to existing customers," said Brian Brown, report author and Defaqto’s head of general insurance.

"We can expect to see distribution patterns change as insurers try to reduce costs. This is most evident from the increasing use of the Internet for purchase as well as research in the home insurance market."

Defaqto also believes that over the next few years changes in the home insurance market will mean brokers not able to deal with customers on websites and through emails will struggle to survive, new types of cover and product changes will become more frequent and more items of cover will become optional.