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Love it? Locket. Home insurance the smart way. 

Krystian Zajac, Co-Founder and CEO of Locket spoke to Modern Insurance Magazine on the potential smart technology has to redefine the home insurance industry and how Locket is a company doing things differently. The London-based insurtech offers a fairer price on home insurance to customers who install smart devices in their home. Locket offers preventative insurance, utilising smart technology to actively avoid incidents as well as being there if something goes wrong.

Q. Locket described itself as “an insurance company with humans at its heart”, tell us a little bit more about Locket and how your approach to insurance is “challenging the status quo of the establishment”.

A. I believe that there are two massive problems with insurance:

Firstly, the reality is there’s nothing protective about insurance as it is. It is not an umbrella that’s going to shield you from rain. It is a towel. We believe that we can be both the “towel” and the “umbrella”. If we leverage smart technology to protect what makes you you – the human element – then we can actively help to prevent bad things from happening. A watch given to you by your dad who passed away isn’t going to be replaced by money. Money doesn’t necessarily fix everything. That’s where we come from. We help our members to protect what’s theirs, rather than just paying out.

The second issue that I have is that insurance is like gambling. I understand the transfer of risk, but statistically speaking and looking at it, it is very much like gambling. The difference with gambling is that you bet on something good happening to you. With insurance, you bet on something bad happening to you. So even when you “win” – you might need to make a claim – it’s a sad experience. Yet (like gambling) in financial terms, the House always wins.

We believe it doesn’t have to be that way. Our members get something in return, regardless of whether they make a claim or not. So, one of the things that we are doing for them is introducing additional perks and benefits. It’s almost more like a subscription to a club than a premium for insurance. One of the very first things that we’ve offered is a digital marketplace within the app where you can buy additional products, devices and services at heavily discounted prices. Prices that we negotiated, on the behalf of our members so that they have cheaper access to great tech. A return on investment of sorts.

I like to describe what we’re building as “self-driving insurance”. If you can think of a self-driving car, its main purpose is to take you from point A to point B, actively avoiding accidents by using modern technology. We want to apply the same thinking to home insurance.

We try to help our members protect what is theirs. Rather than just paying out

Q. With such contemporary methods and devices being implemented at the cost benefit of the consumer, would it be accurate to presume there is a clear demographic ready and willing to adopt your products? Is age and location a deciding factor for your current customer base?

A. We believe our product is for everyone. It’s not like we want to limit access, however, from a pure marketing point of view, we’re focussing our efforts on a very well-defined niche of early adopters of technology who are slightly more affluent than the average person in the UK.

The biggest target audience for us are those who have already invested in some sort of smart protective technology: CCTV, video doorbells, leak detection solutions. Yes, we’re targeting early adopters of technology, but we are not limiting it geographically in any way, shape or form within the UK. 

It’s almost more like a subscription to a club than a premium for insurance

Q. Your recent crowdfunding campaign on Seedrs received above and beyond your original target – with the emerging movement towards preventative insurance and alternative methods of risk assessment, is this a pivotal point for how insurance is perceived by customers?

A. We definitely see our Seedrs campaign as a massive validation of the idea. The initial target was hit within 14 minutes and this was still in the private mode before actually being publicly listed on the platform. We were like most crowdfunding start-ups – we had a figure sitting in our mind, it was £1.2 million, which we exceeded. We believe this very clearly validates the idea behind Locket.

Q. Do you find your members’ discount on the latest available devices an incentive or do members currently typically use technology already within their home?

A. They typically already have some technology. But many don’t know how they can leverage it. One of the things that we are currently working on is more educational content on how to make the most of your tech. There are certain devices that we recognise where it might not even be obvious why we give you a fairer price on your insurance for owning it.

To give you an example: a connected thermostat – why would we want to give you a fairer price on your insurance because of it? Well, if you live up north where the winters are more severe, it’s obviously because of frozen pipes. But, for us, it’s an indication of how risky you are; if you invest in technology that’s invasive in its nature (you have to run a cable, put it on the wall, screw it on) this tells us that you care about your property more – you invest in your home.

Q. Is it true you just partnered with an ex-burglar? What insight and value are you hoping such a partnership will bring to both your members and company?

A. Yes, we are very excited about Michael joining us. If you ask an incumbent, “would you partner up with an ex-burglar?”, they would probably shy away because of potential bad press. But we actually embraced it – who’s better to tell you how to protect your home than an ex-burglar looking for your weak spots?

We’ll be creating a lot of content with Michael. He’s become a brand ambassador and will be creating educational videos on a monthly basis for our members and non-members alike. We are happy to share this sort of knowledge with everyone. We’ve just had a live Q&A session on our Facebook group. People joined in and asked him a lot of questions and we will continue doing it, so that as a homeowner or a renter, you know how to protect your home.

There’s obviously some noise about the proposition we bring to the table

Q. How has the newness of what Locket offers been received by the wider broker community?

A. We don’t know yet. We genuinely believe we can make a big splash in this industry. Some are watching us closely. We have had plenty of people approaching us from within the industry wanting to work for us, for example. So, there’s obviously some noise about the proposition we bring to the table. We have a lot of interest from the investment community, which validates what we set out to achieve. But nothing obvious as to how they feel about us.

 Krystian Zajac, Co-Founder and CEO of Locket is a serial entrepreneur specialising in transformative smart home and IoT insurtech products. His multi-award-winning ventures have been rewarded as some of the most disruptive in the world.
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