Sunday, 23 January, 2022

How Luko wants to revolutionize home insurance


The promise is strong: “insured in 2 minutes, reimbursed in 2 hours, a craftsman in 2 days”. And the ambition displayed by Luko is no less strong: to reinvent home insurance. The young start-up opened its offer for subscription on 1is September, and yet, 10,000 households had pre-registered on the waiting list even before that date. What do they have in common? “We can say that they are digital, they already use online banking services for example”, explains Raphaël Vullierme, founder of Luko alongside Benoît Bourdel.

It must be said that the start-up relies heavily on new technologies to disrupt the home insurance sector. It is moreover by developing connected objects to monitor consumption, water or even door movements and thus prevent certain risks of disasters that the Luko project saw the light of day almost two years ago. Imagined at the time in partnership with insurance companies, the start-up has taken a step forward and now offers – allied to La Parisienne Assurances to guarantee insurance policies – its own “home” offers. Without forgetting this “connected objects” dimension to protect homes.

“25% cheaper”

“Insurance is an industry where the big players are aware that they are going to be disrupted”, believes Raphaël Vullierme who does not hesitate to mark his difference. “The less insurance reimburses, the more money it earns. The interests of the insurer and the insured are therefore not always aligned and the French have little confidence in their insurance,” he asserts. Conversely, Luko claims to have no interest in not quickly repaying his policyholders. Why? Because 30% of contributions are used to finance claims management costs. The remaining 70% go to a fund intended to compensate policyholders in the event of a claim. And if there is money left in this fund at the end of the year, it is donated to an association chosen by the policyholders …

Management costs which remain limited at this level thanks to the use of new technologies and artificial intelligence. “For claims that remain easy to deal with such as a broken window for example, the insured films the damage and we offer him a solution, compensation or the dispatch of a craftsman, within two hours. For heavier claims like an apartment that burns, we favor human contact and we send an expert in a few days “, describes Raphaël Vullierme. New technologies that also affect prices. And Luko ensures that it offers offers “25% cheaper on average” than traditional insurance. “For a two-room apartment in a provincial town, the offer will be between 100 and 200 euros per year [entre 8 et 17 euros pas mois en moyenne, ndlr]”, specifies for example the co-founder of the start-up.

2 million euros raised

Enough to find a place in this market while the French Insurance Federation recorded 40 million home contracts in 2017? “New players like Luko allow us to take a fresh look at our business, force us to look at it in a different way and to move,” acknowledges Guillaume Gorge, director of the Auto-Home offer at Axa France. But he adds that in the home insurance market, “access to distribution is a key element” and that a “physical network has a significant strike force”. Guillaume Gorge identifies four underlying trends that are shaking up this market: the simplification of the customer experience, connected objects, the meaning carried by the company through CSR for example, and big data. Four trends on which Luko is surfing but which Axa has also integrated. Guillaume Gorge reminds us that the group has, for example, invested 2 million euros in a big data component to adapt the pricing very precisely according to the portion of the street where the accommodation is located. On the simplification aspect on which Axa – which has 3.5 million “home” customers – is also positioned, he judges that “what is complicated is not simplifying the experience at the time of subscription but at the time of subscription. when the claim is being managed “, recalling that” each claim is different “…

It is difficult to know if Luko will meet his audience. If Raphaël Vullierme does not slip a word about Luko’s objectives in terms of clients and turnover, he says he “seeks to increase the client base” and does not have “a short-term profitability objective”. Luko certainly arouses the interest of business angels. The start-up raised two million euros three months ago, in particular from Xavier Niel and Bruno Rousset, the founder of April Assurances, but other experts in the sector are also committed to their side such as Pierre -Yves Durand, the former marketing director of Axa for example. In any case, Luko’s ambitions do not stop in France: the start-up could be present in Germany and the United Kingdom from 2019 …

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