Reinventing Insurance > Fixing UK Home Insurance

buzzvault is a newly launched Insurtech on a mission to fix home insurance with an offering built entirely around customers. This manifesto explains who we are, the problems we are trying to fix within UK home insurance and what makes us different from other start-ups currently entering the market: out-of-industry expertise, video tech and ease-of-claiming.

Whether you’re an Insurtech enthusiast, a financial-inclusion advocate or a potential early-adopter customer, we hope this provides some welcome new perspectives on an old problem – the UK’s broken home insurance industry.

Why UK Home and Contents Insurance is Broken

Last summer, a long time still before we launched, we conducted some research into the home and contents protection gap in the UK. And the results were fairly shocking. So what did we find?

Well, firstly we attempted to quantify the volume of home contents that our small island is home to. And we estimated conservatively that we’re looking at:

  • 4 billion books
  • 41 million smartphones
  • 38 million laptops
  • 33 million tablets
  • 27 million TVs
  • 26 million washing machines
  • 25 million bikes
  • 13 million dishwashers
  • 2 million golf clubs
  • 1 million tennis rackets

Now that’s a lot of stuff… And, according to figures from the Association of British Insurers (ABI), the value of UK home contents comes in at a whopping £950,000,000,000 (that’s almost £1 trillion!). Which gives us £35,000 worth of contents per home on average, and begs the question: where is all the contents insurance?

£266 billion of UK home contents are unprotected

That’s right – our eagerness to acquire contents insurance has lagged significantly behind the zeal with which we acquire new contents. The ABI estimated in the same study that 28% of households had no contents cover whatsoever. That’s the equivalent of 16 million people and £266 billion of household goods unprotected.

A bit more digging revealed that the contents protection gap is more pronounced among certain UK demographics than others, with renters, students and low-income households being particularly exposed:

This isn’t where the protection gap stops though. We haven’t even begun to look at the partial protection gap created by under-insurance. The Telegraph recently estimated that under-insurance affects as many as 1 in 4 households (that’s 6.8 million homes in total). And what this means is: millions of people whose home insurance isn’t going to do what it says on the tin when it comes to making a claim.

Under-insurance is the bane of homeowners and renters alike, and the reason is simple: people typically underestimate the value of their things (often by up to 40% percent). And, even if policyholders get the value of their things right, that value tends to increase steadily over the years (we reckon by around 7.5% a year).

This means that, over time, most people gradually become under-insured and may get hit by “averaging” when, down the line, they come to claim. And still that’s not all. Even if people have the right amount of insurance in place, the non-specific nature of blanket cover often means they will have to prove the existence to their insurer of all those individual items they no longer have – and all this at an already traumatic moment in their lives.

So where does this leave us? Millions of people are being served poorly by the existing home and contents insurance market. And millions of people aren’t being served by it at all. Which brings us to the principle concern of this manifesto: how is buzzvault tackling the issues that have plagued the home-insurance industry to date?

Interested to learn more about the UK coverage gap and its impact on different demographics? Then read last summer’s full-length research piece, Where on Earth is All the Contents Insurance?

So, where does buzzvault come in?

buzzvault approaches the challenges of home insurance from outside the confines of the traditional industry. In fact, we began life as buzzmove, a price-comparison and booking platform for home moves (more on our timeline as a company below).

These roots within removals give us a unique perspective on people’s homes and things. In short, what we have done is this: we have taken the household inventory the most easily forgotten, least sexy part of your house move – and made it the centrepiece not just of your home insurance but of a whole new approach to managing your possessions.

Instead of the blanket cover that’s the industry norm, we offer personalised coverage that’s based on a customer’s vault: a secure and lasting digital record of what they own and its value. While you can populate your buzzvault yourself, the quickest way to do this is to let us do it for you: by scheduling a short video survey through the buzzvault app. This way, our in-house team of video surveyors can draw up a household inventory for you in as little as 15 minutes – and this becomes the basis for your personal vault and policy. All you need is a mobile phone and an internet connection.

We’ve all backed up our files or photos before – well, one way to think about buzzvault is as a way to back up our physical things, via an app that fits in your pocket.

Once your vault is up and running, you can add new items to your cover at any time and at the tap of a button. And if something goes wrong, like you’re burgled or your house floods, you can just go into the app and get it back, with none of the usual head-scratching and heartache that attends on insurance claims.

You don’t need to worry if you have a sufficient level of cover for your items; if they’re in your vault, they’re covered. You don’t need to remember your lost items, you don’t need to prove they existed, you don’t need to prove their value – thanks to your vault, all of this is known already. There’s literally video evidence of them in your house.

So that’s how it works. Now let’s look at three reasons why the industry should take notice. Firstly, we are an out-of-industry player disrupting insurance; secondly, our offer is powered by unique video technology; and thirdly, our whole approach is built around ease of claiming.

Three reasons why you need to check buzzvault out

1. At last, an out-of-industry player disrupts insurance

There is chatter aplenty within insurance about the importance of out-of-industry angles, and with good reason: they bring huge competitive advantage in terms of customer access, customer data and customer perceptions.

With buzzvault, we have brought together under one duvet the ever unlikely bedfellows of insurance and removals. And it’s paying dividends.

Our first product, the buzzmove platform (a price-comparison and booking site for home movers), gives us privileged access to customers at one of the main “trigger moments” for purchasing home insurance, namely moving home. If you’re a first-time buyer, home insurance is generally mandated by your mortgage provider. And if you’re already on the housing ladder, then moving home is a chance to reassess your position. Because, whatever happens, your old policy – for your old home – is no longer going to be relevant.

And, if you’re an uninsured renter or student moving through the buzzmove platform, then we have the opportunity to present you with a timely offer of contents insurance at a time when you’ve just taken stock of all that stuff you lug around in your life. It’s clear from the stats we led with that many people within the renting and student demographic are not actively seeking insurance. The solution to the protection gap is not to sit back, it’s to actively take insurance out to customers by embedding it inside services that they do use. And where better to embed it than in the home move?

So, our removals platform lets us approach customers at a busy, stressful time in their lives and kill two potentially quite die-hard birds with one stone: home insurance and the house move.

This isn’t to say you have to be moving home to get buzzvault insurance. Fundamentally, we regard your vault as a new data currency or ecosystem. One that can be used to help you move home or to get protected, or both – you choose. As we grow our customer base, we’ll certainly be looking to add more vault-related services to our offer. And if you’re intrigued by the idea of your personal vault, we’d love to have you as one of our early-adopter customers!

2. Our home insurance is video-powered

We said above that, thanks to our affiliation with the removals industry, we are able to kill two birds with one stone: moving home and home insurance. But what do these birds have in common that lets us take them down with a single shot?

The answer is the household inventory, that long list of everything you own and its condition. Inventories help your move by allowing removal companies to accurately quote the job; inventories underpin our personalised insurance by telling us exactly what you own.

Now, unless you have a rather left-field conception of fun, you probably don’t want to do an inventory. Inventories are long, boring and often inaccurate. But this is where our video technology comes in: we let you create a household inventory with none of the usual drudgery and inconvenience, often in as little as 15 minutes. So you can get a super-accurate quote from your removal company and a super-accurate insurance policy, both from one short video call.

A super-accurate insurance policy means no more under-insurance and no more of the dreaded “averaging”. Your cover level isn’t based on what you thought was the value of your things 3 years ago – it’s based on the value of your things right now. And, what’s more, you can update your vault with new items as and when you acquire them, so that your policy always stays up to date.

Our video technology is a fast, convenient way to populate your vault and arrive at the correct level of cover. But there’s more to it yet. The fact that your insurance policy is based not just on a record of your things but on a video record makes it incredibly robust from a claims point of view. This saves time, money and stress for all parties in the chain. Let’s take a closer look.

3. Our cover is built around ease-of-claiming

buzzvault isn’t just about reaching the right customers at the right time or killing multiple birds with a single data-rich, video-powered stone. It’s about providing our customers with a superior service too. And this starts with understanding home-insurance customers’ pain points.

In the home line at least, a mutual lack of confidence in the claims process has undermined the whole raison d’être of insurance: to give us the peace of mind to make big decisions, take risks and, in short, get on with life worry-free. And it’s long been a vicious circle, with a lack of trust in insurers increasing fraud incidence, and an increase in fraud bolstering insurers’ attitude of suspicion towards their customers.

A quick google will uncover countless stories of destitute former homeowners denied their claims by faceless insurance conglomerates. And our research into the home and contents protection gap last summer threw up a worrying stat: 6% of homeowners have had a pay-out of £1000 turned down in the past 3 years. So if this wasn’t you, then it was probably someone you know!

6% of homeowners have had a pay-out of £1000 turned down in the past 3 years

For all these obvious signs of customer pain, home insurers have – to date – found few avenues to differentiate their offerings other than on cost. So rather than increasing the value of the product, insurers have instead engaged in a race-to-the-bottom on price. But it doesn’t have to be this way.

buzzvault, by its very nature, instils confidence in the claim. In fact, we owe our genesis to a terrible claims experience undergone some years ago by our founder, who promptly cast her eye back in order to work out why things had gone so wrong, and change them. The main problem she uncovered – and the reason for her poor claims experience – was that home insurers, unlike insurers in other lines, don’t accurately know what they’re insuring in a customer’s home, or what it’s worth. And it’s this lack of transparency that underlies the prevalence of “blanket cover” in the home line.

This is why buzzvault is built around an up-to-date – and constantly updatable! – record of your things and their value. Goodbye woolly blankets, hello data-driven precision! If it’s in your vault, then you know it’s covered And, just as importantly, you know your insurer knows it’s covered too. There’s likely even video evidence of its existence, condition and location within your home. In this context, those traditional enemies, insurer and customer, no longer have reasons to mistrust each other – and the trust and transparency issues in home insurance are significantly lessened.

buzzvault hasn’t been live long enough for us to compile the stats. But, going forwards, we expect less fraud, shorter and simpler claim resolutions and, as a joyous byproduct of both these things, lower policy costs also. And that’s before we even think about the smart, value-added services that something as data-rich and personalised as your vault could enable.

So, where do you fit in? buzzvault early-adopter bonus

The very fact that you’re reading this to begin with makes you special you’re someone who’s taken an interest in the state of UK home insurance. And we’d love to make you part of our mission to fix it.

For a limited time only, we’re offering a £40 Amazon Voucher to early adopters of buzzvault. Get yourself quoted in under two minutes and, once you’ve activated your policy, you’ll receive your voucher (promotion Ts & Cs apply).

Where next for buzzvault?

First things first, here’s a quick timeline of the most significant moments on our journey so far:

  • March 2013: establishment of buzzmove, our removals price-comparison and booking site
  • August 2016: £6 million seed round led by White Mountains Investment Group
  • March 2017: launch of buzzsurvey, our video tech for household inventories
  • February 2018: 5-year underwriting partnership announced with Munich Re
  • October 2018: achieved FCA-regulated status
  • December 2018: launch of buzzvault (check out our Launch Diary also!)

Following our UK launch at the end of last year, we are looking both at international markets and at other lines of insurance (such as pet and travel insurance) as areas of expansion. But we believe the future could be bigger still …

The Future = Insurance Ecosystem Services

Ultimately, we want to make buzzvault the centrepiece of a new ecosystem of connected services: the foundation stone for a new way of moving, protecting and managing our things. We believe the data in people’s vaults will become increasingly valuable over time – and that it can unlock further smart thing-related services that go well beyond insurance.

This is easier said than done, however. Ecosystems are based on value exchange, and the key to building and maintaining them is customer trust. Customer data is the oil in the services machine, and the minute customers stop trusting – and being willing to share their data – the wheels grind to a halt. And, in 2019, you cannot win customer trust through ironclad security alone. In addition to protecting customers’ data from external threats, you must actively demonstrate your own responsible data stewardship.

buzzvault is massively data-driven – after all, customers entrust it with a detailed list of their worldly possessions – and we’ve got big, data-driven ambitions. This is why we’ve baked in consumer trust from the beginning, which is something that plenty of today’s data-driven service providers have sadly neglected. Customers can add or remove items from their vault – and their cover – whenever they want. This way, they can see – and control – what their insurance covers, any time they wish. And, because their items have been recorded and verified, there is transparency when it comes to claiming too.

So that’s where we’re at, as of Q1 2019. Download the buzzvault app and let us know what you think. And, if you’d like to go ahead and get an insurance policy, be sure to sign up for our early-adopter bonus and get any cancellation fees paid in addition to a £40 Amazon Voucher. Treat yourself to something nice for your home (like a gnome, a clock or a low-end croquet set). And then, of course, add it to your buzzvault!