Insurance unicorn Hippo just bought a company that sends a technician to your home to give it preventative checkups
- Insurtech unicorn Hippo said on Thursday that it has bought preventative home maintenance company Sheltr.
- Hippo, founded in 2015, is valued at $1.5 billion and has raised $209 million dollars to date. The company, which provides home insurance in 19 states, is one of the main players in the surging insurtech space. Insurtech funding increased from $2.22 billion in 2017 to $4.15 billion in 2018.
- Sheltr, founded in 2018, has raised $3.2 million in funding from a range of individuals and organizations, including MetaProp.
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Hippo is part of the booming insurtech crowd, but now it's adding a human touch to nip maintenance problems for homeowners in the bud.
The insurer has bought a preventative home maintenance startup called Sheltr for an undisclosed price. Sheltr sends out people to conduct "check ups" to find problem areas that require fixing, in the hope of catching issues before they become larger, and more expensive.
Startups that are looking to put a tech spin on the insurance industry have exploded in recent years thanks to an influx of venture funding. Legacy insurers have also been making their own investments or partnerships.
Hippo, founded in 2015, is valued at $1.5 billion and has raised $209 million to date. The company, which touts its use of tech both to sign people up for policies and to monitor homes, provides homeowners insurance in 19 states and is one of the main players in the insurtech space.
Insurtech funding jumped from $2.22 billion in 2017 to $4.15 billion in 2018, and 2019 is on pace to top last year's amount.
Sheltr, founded in 2018, has itself raised $3.2 million from backers including MetaProp, the New York-based proptech venture fund.
"We have a clear alignment with insurance, " said Andrew Wynn, cofounder and CEO of Sheltr and now director of Hippo home services. The relationship between the two companies began as Hippo was searching for ways to make insurance "proactive instead of reactive" David Blanaru, VP of growth initiatives at Hippo, told Business Insider.
"We were exploring services that could further reduce claims for customers," Blanaru said.
Hippo doesn't disclose its loss ratios, or incurred losses as a percentage of insurance premiums, though it has said they are below the industry average.
Earlier this month, Business Insider reported that Lemonade, the SoftBank-backed renters and homeowners insurance company, had postponed plans for an IPO that it was gearing up for this year. Lemonade said in a Nov. 14 blog post that its third-quarter loss ratio, was 78%. That compared to 368% in the first quarter of 2017, it said.
While some insurtech companies have used sensors to monitor potential problems in the home, Sheltr's service is much more hands-on. The company sends out a technician to inspect the home, noting any potential issues, and then sends the homeowner a full report on the house.
In its pilot with Hippo, the company made a 30-point checklist of potential issues. According to the two companies, Sheltr identified issues that could cause $10,000 or greater claims in 51% of Hippo's client homes.
Sheltr, currently available in the Bay Area and around Dallas, will continue to operate with the same team. Wynn, who called himself a "slightly neurotic person," founded Sheltr after a a clogged drain led to extensive water damage in his home, leading him to create a proactive home maintenance service.
As to what preventative problems are most common, Wynn says he has collected a lot of useful data.
He told Business Insider that less than a third of the homes the startup has entered have a working fire extinguisher. He also said that customers often don't know that they need to clean out their dryer vents, which can lead to fires, and don't always attend to their furnace filters, which can cause significant decreases in the furnace's lifespan.
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