It announced its acquisition for the majority stake of Neos last week
The insurer told Insurance Times it plans to use the Neos’ expertise on smart home connected devices in a bid to battle escaping water claims and increase engagement with customers.
The insurtech has a wide offering of connected home devices from smoke sensors and water leak sensors to smart cameras with sound recognition.
The announcement follows the ABI citing that water claims cost insurers around £3.9m per day.
Insurance Times caught up with Matt Poll chief executive at Neos and Aviva’s product and proposition director, Adam Beckett to discuss the deal, water leak claims and plans going forward.
Water claims: no universal device
For Neos, Poll said: “Preventing the escape of water has always been a core focus, it’s a very costly one for the industry and both the insurer and customer benefits.”
The device can detect small leaks to dripping taps.
But Beckett added that part of the problem is that although devices for escape of water are available, there is “no universal one on the market.”
“We think escape of water is something that a number of insurers across the market this year and last have seen a rise in, especially in terms of instance of claims and the value of it.
”So we do think that being able to understand whether customers have got a leak, be that from a leaking toilet or a dripping tap through to something more fundamental that you can’t see, is important” he said.
Beckett hopes the use of smart home connected devices through its partnership with Neos will help it mitigate the number of claims on escaping water and in turn allow it to reduce claims costs and manage premiums more effectively.
Aviva invested £5m in Neos in May 2017, before taking a majority shareholding last week. The insurer previously has tested the smart home device on a small sample of customers to understand how they responded to technology in combination with insurance, to identify the right price point and service proposition for it.
Poll said: “I think it extends their participation in the Neos journey even further, I think Aviva really recognise the value of what we are trying to do, adding value to customers and the preventative benefits of the proposition we offer.
“We had other options on the table, but Aviva was our preferred option as we have had a strong working relationship with Aviva from early days and we wanted to continue that.”
But for Poll, customers are at the heart of his mission. He says that using smart technology to prevent leaks also connects people to their homes.
He sees this as a “fringe benefit”, and spoke of one customer who managed to catch her son’s first words on one of Neos’ smart cameras.
And he added: “When do you ever hear of that sort of engagement with an insurer?”
Both firms share a similar mindset on the matter.
Beckett explained that investing more money in the insurtech was a “logical next step.”
He said Aviva saw that its connected home proposition was working well with evidence of good service experience and overall customer satisfaction, as a result of its initial investment.
It partnered with Neos to drive propositions for its customers.
But as part of Aviva Ventures, Beckett said partnerships are often made where the insurer sees “good strategic value” and a potential good return on investment.
Beckett hopes the insurer can deploy the technology on a larger scale in the future.
He said: “We wanted to be confident that the proposition was the right one for customers before we progressed so that’s where we will move to now.”
Poll said that he hopes the partnership will help the firm extend its reach and accelerate the Neos plan.
Meanwhile last week Azur, a Hyperion and AIG backed insurtech partnered with a German manufacturer on a smart water leak device.
And back in September, brokers Home and Legacy urged insurers to “reward customers” for turning off their mains after it was revealed that August was the month with the highest water claims.
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