The UK’s first smart home insurance provider Neos is launching nationwide today in an attempt to change how insurance works.
Developed by Matt Poll, former commercial director of insurer MoreThan, and Krystian Zajac, who set up the smart home company Fibaro, Neos is an example of the new trend of insurtech (insurance technology) where startups are changing the relationship between insurers and their customers.
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This is a growing part of the industry, with London being named the “undisputed centre for European insurtech” by Accenture and CB Insights.
Neos works as any insurer does. Customers can buy home insurance from Neos, using the company’s website. But instead of just receiving an insurance policy, customers get a full connected home solution consisting of smart devices for their household items.
All the smart devices are connected through the Neos app which allows the customer to monitor their home. If there’s an issue, say a pipe burst whilst they are on holiday, the Fibaro device will send an alert. Neos will then send someone out to fix the pipe to fix the problem. It’s moving the insurance relationship from a reactive to an active one.
“All our research shows that no one wants to make a claim,” Poll tells Verdict. “If something bad happens, it’s a disruption to your life. And for insurance companies, the fewer claims they get, the more profit they can use to re-invest in the business.
“If you can move insurance from an ‘after the event payout’ to a more preventive-based solution, then the customer will benefit and we believe that the insurer benefits from that.”
From beta trial to nationwide launch
Neos launched a beta trial in London last year in partnership with UK insurers Hiscox to see how customers would take to the new product.
“The test was really successful. Since then, we’ve been learning what customers want and evolving the solution to get ready for the nationwide rollout,” says Poll.
One element Neos has added in as a result of the trial is the ability for customers to self-install the new devices or have a professional do it. “It’s very easy [to install], but we also recognise there’s a lot of reticence from customers. Smart devices are still quite new to them, so we now offer a professional installation service nationwide.”
The startup raised £5m in its Series A round, backed by Aviva Ventures and the global insurer Munich Re. It’s Munich Re that provides the underwriting for Neos, so it can offer its own insurance solution. As well, it is authorised and regulated by the Financial Conduct Authority.
The investment has meant that the team has gone from Poll and Zajac to a total of 30, with a developers team of five in a satellite office in Poland. “It’s about having the right sized team for the job in hand,” explains Poll. “We’re young as a company but we’re super ambitious and we’re looking to grow rapidly. We’re making sure we have the right guys to help us along the journey”.
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Neos will go live nationwide this week and will be available through comparison service website, Compare the Market. Poll says the time is right now for the full launch.
“We’ve taken our time, building what we think is the right proposition. I’m quite excited to see it go live nationwide and hopefully scale accordingly from there.”