Hiscox and its partnership with water leak alarm manufacturer LeakBot could see it eventually challenge the leading players in the household buildings insurance market. While GlobalData’s 2019 UK Consumer Insurance Survey suggests that UK consumers are currently far more likely to take out household buildings insurance from other providers, Hiscox’s new offering is set to strengthen its proposition and market position.
The partnership is a significant one as Hiscox will offer LeakBot sensors to all buildings-only customers at no extra cost. Aviva previously launched a partnership with LeakBot in 2017, and it has maintained its leading position in household insurance since then. However, the scale of Hiscox’s deal sets it apart from Aviva’s as the detectors are available to all buildings customers, while Aviva’s deal is for selected customers and more geared towards home emergency.
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The partnership will see Hiscox become the first UK insurer to roll out full-scale claims mitigation insurance technology to buildings insurance policyholders. LeakBot’s patented Thermi-Q thermal technology connects to a wireless network and alerts the customer of a water leak on the mobile app, while also providing access to engineers so that the leak can be fixed straightaway.
Escape of water is a key concern for the household insurance market and led to £616.8m in claims in 2019, making it the single largest reason for claims. Insurers are beginning to get to grips with the problem, as the claims total fell by 3.8% a year prior, though it still rose by 4.5% between 2014 and 2018, according to the Association of British Insurers. It is consequently attracting a lot of attention from tech providers: FloodFlash, for example, made the headlines after paying out 100% of claims one day after Storm Ciara. It used its automated payout system, which is based on water levels reaching a pre-agreed level in a customer’s home.
The offering of this preventative technology for free by Hiscox will make its buildings-only policy a strong proposition. It will appeal not only to homeowners but also landlords. Landlord insurance requires the cost of leakages to be covered by landlords, so immediate notifications for leaks could be extremely valuable as they do not live in the property.
Hiscox is not a major player in any type of household insurance. Offering water leak detectors could differentiate it from the competition, but it has a lot of ground to make up before it can be considered a frontrunner in the market.
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By GlobalData
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