Aviva is splashing cash on a startup focusing on insurance for connected homes in the latest signal of the insurers intent when it comes to technology – and it may even stretch to buying a small tech firm in future, it has revealed.
The venture arm of Aviva has led a £5m series A funding round in Neos, a London-based tech firm founded last year.
Neos offers customers insurance premiums along with cameras and other sensor technology around the home which can detect things like break-ins or leaks, with incident alerts sent directly to your phone.
The company said the fresh cash will help it expand into the mainstream and Aviva will also gain access to the startup's Internet of Things (IoT) platform. Munich Re will also provide underwriting to Neos.
“We’ve built a completely new type of home insurance product. Never before have we see an insurance company offer to proactively protect your home from the threats of water, fire and theft," said co-founder and chief executive Matt Poll, who was previously a director at MoreThan.
"The investment from two respected insurance brands, Aviva Ventures and Munich Re, cements our belief that what we’re doing is the future of insurance, given their leadership in innovation. When you combine this with our distribution partnership with Zoopla, and Hiscox, we’re excited about the benefits we will be bringing to consumers at full market launch later this year, through positively disrupting the market," he said.
Insurance goes digital
Aviva Ventures has previously invested in two other smarthome companies: Leeds-based connected home camera and sensor maker Cocoon and online property startup Opun.
Aviva's efforts to adopt digital technology in the traditional world of insurance are taking place in Hoxton Square, where it houses around 250 designers, data scientists and other digital technology experts working on creating new products and services for customers.
The so-called "digital garage" was set up at the start of 2016 as a consciously separate part of the business. Aviva plans to grow the number working on digital to around 600 or 700 by the end of the year, said chief executive Mark Wilson. He also revealed the insurer is spending at least £100m a year operationally on this new part of the business but more is being spent in terms of digital infrastructure in the wider business.
He said the UK's largest insurer would consider "smaller tactical" acquisitions in the tech space in addition to investments such as Neos, as well as partnerships. Aviva earlier this year signed a deal with Chinese internet giant Tencent to sell its products online in Hong Kong.
Wilson said he has even fielded calls from top Silicon Valley tech executives interested in what it's doing, and which he insisted "isn't a lab".
"It's a business and the objective is to make money," he said.
A new feature currently being tested is a virtual vault where people can take pictures of valuables and their receipt to check if their item is covered. It uses image recognition technology to reduce the hassle for users of filing in information. It plans to roll it out on the MyAviva app later this year.
Areas of interest for the company are big data, artificial intelligence, robotics, digital health, cyber security and automated cars.
"It [insurance] smells like a market absolutely ripe for disruption," said Wilson. "It [the digital garage] is a game-changer."