Luko, from IoT to home insurance
Luko, created in 2016, was originally dedicated to IoT for connected houses, providing sensors to incumbent insurance companies. In May 2018, Luko augmented their scope to the B2C insurance business, providing since then home insurance, non-occupying owner insurance, and new mobilities insurance (scooters, segways, gyro, etc.). This in-house insurance activity is a strong leverage to distribute their intial sensor products, providing an extra service to their final customers (tracking energy expenditures, open door detector, etc.) and collecting insightful data from them.
Their insurance services are distributed 100% online. The company is also certified B-Corp, certifying their positive impact in Global Society (ex: donations to associations).
Luko has chosen a quite unique business model in Europe, similar to the “Lemonade” business model operating in the US.
A fixed 30% share of the insurance fees (premium) paid by Luko customers are paying the service provided by the startup. 70% are covering compensation claims. If there is money left over at the end of the year, the company is giving back the surplus to charity. The Giveback structure ensures alignment of customer interests along with society’s best interests.
Besides the business model, Luko provides a strong end-to-end experience to customers, with a strong operating model. Luko prospects get covered in only 2 minutes, answering a few questions online. But the very best assets of this operating model is the ease and speed of the compensation payment process. Customers can declare a claim in 2 minutes via the app (video call with an expert to film the damage). Whether the claim is simple, the customers is refunded within 2 hours (also possible with Instant payment via Lydia) or the company send over a handyman to the customer house.