US home insurance firm Hippo has just acquired home maintenance company Sheltr, providing a fitting new use case for Hippo’s deployment of smart devices. The move reinforces the slow yet sweeping transformation of the responsibilities that we are seeing among insurers, which are moving towards more preventative roles in the market.
Hippo Insurance is a California-based insurance company, launched in 2015. The most recent investment round of Series D funding raised $100 million from six venture capital firms, and it has around $209mn funding to date. Sheltr, founded in 2018, provides a home checkup service, where the company examines up to 28 separate components in the home. This saves consumers money in the long run, as faults are identified earlier, which for insurance types like Hippo, should mean significantly lower risk profiles.
Hippo’s Head of Product, Aviad Pinkovesky, has spoken previously of a desire to create a “continuous, value added” relationship with consumers, rather than the traditional insurance company-consumer sporadic relationship of simply filing claims and paying premiums. This acquisition does just that.
On its website, Hippo frames the acquisition as incredibly beneficial to its customers, who now have “more opportunity to avoid claims-related incidents in their homes.” Although not announced, it’s unlikely the purchase was for more than single digit millions.
This is not Hippo’s first partnership with a preventative IoT business. In September 2018, the company partnered with smart-home OEM Notion. The partnership meant that Hippo could provide some new customers with Notion Smart Home Starter Kits in return for a discount on their insurance premium.
The ‘InsureTech’ industry, to use that grating moniker, seems to have gone quiet in recent times – compared to the hype of the past few years. This is the first bit of InsureTech action we’ve heard in a while, as it seems insurance and IoT industries are past the excitement of the honeymoon phase.
This is likely because the two industries are in a bit of a circular predicament. On the one hand, there is a widespread feeling that insurers should use technology to provide preventative services, rather than just improve the analytics guiding their policies. Yet this is only possible with more hardware at the edge of networks, something that is timely and expensive to operate.
Insurance should be a key sector for aggressive IoT penetration. InsureTech has clear deployment use cases in transport, housing, health, as well as commercial and industrial uses. However, it seems insurance companies are losing their infatuation with IoT. On the Allianz Partners website, the most recent IoT blog post was in June 2018, whereas on the Munich Re website this was even further back – April 2017. The sector has lagged, and doesn’t seem to have taken advantage of the surge in the smart home and industrial markets. However, this is not to say there has been no action.
Bajaj Alliance, India’s leading insurance provider, introduced GPS trackers to track school children and the buses they travelled on as part of its policy covering accidental OPD and accidental hospitalization. Some insurers like Allianz have initiated ‘cooperation models’ whereby insurance discounts or integrated products are offered to consumers who install smart-home devices. This can also lead to home security or convenience services such as Liberty Mutual.
Earlier this month, Munich Re subsidiary, Hartford Steam Boiler (HSB), announced it had won a Silver Efma-Accenture Innovation in Insurance Award. Having spent $300mn on relayr, HSB provides IoT sensor systems for insurance purposes, catering to clients such as residential properties, schools, hospitality environments, campuses, public health buildings, and commercial properties.
American Family Insurance already offer discounts of up to 5% to customers who introduce smart metering into their homes. Dental insurer Beam provides toothbrushes to customers which monitor that they are brushing which in turn will result in a discounted rate.
Smart water leak sensor, LeakBot, made by HomeServe Labs, has been slowly conquering the European insurance market. In June this year it announced a partnership with Denmark’s second largest insurance provider, Topdanmark, having already partnered with many British insurance firms.
Vodafone’s IoT Barometer survey in June this year found that 84% of insurance providers have changed their business strategy as a result of the IoT, and the more insurers can collect data on consumers, the cheaper rates will be.
New fields such as ‘Ambient Assisted Living’ link smart homes to healthcare, providing technological solutions to independent living in old age. This will likely prove increasingly important as populations age in the developed world, and the healthcare industry does seem enthusiastic about the viability of smart home and wearable technologies in providing preventative care.