Honey Insurance: Prioritizing digitization within the insurance industry
Rich Joffe, CEO & Founder Honey Insurance

Rich Joffe is the CEO and Founder of Honey Insurance, Australia’s first smart home insurance, that is on a mission to help catch leaks before anyone does. In an interview, Rich speaks on the founding of Honey Insurance and what it takes to lead the company that has now become the fastest growing insurance Company in Australia. Also listen to him speak on how he transformed the business from a mere vision four years ago into a company with 20 major partnerships, including some of the most trusted brands in Australia. Rich also delves deep into how through the company, he has helped navigate the landscape of building tech startups successfully in Australian, the UK and US markets. The company has raised ~$125 million from leading global investors and already captured 1% of all home-owners in the country.

Excerpts from the interview:

Founding of Honey Insurance

Rich explained that insurance companies in Australia were not digitizing their platforms in a meaningful way, and they were not offering customers technology to try avoid claims from happening, so there was a clear opportunity to build a next generation offering for customers.

Insurance industry – challenges galore

“I believe there has been an overemphasis on simplifying the purchase process, and not enough focus on digitizing other areas of the customers experience such as claims automation, more transparent renewal pricing, and value added technology and services to reduce risk for customers before the claim happens.”

Features of Honey Insurance’s comprehensive platform designed for digital natives

According to Rich, the company has digitized all elements of its insurance business from the initial purchase, claim and renewal, right through to allowing distribution partners to fully white label the platform in a matter of hours, not months.

We’ve won >20 exclusive partnerships including Bank of Queensland, Harvey Norman, Bank Australia, AGL, Metricon, Mirvac, McGrath and many others. It is the first time Aldi has done insurance in the world so a very big stamp of approval around how unique and high quality Honey’s digital platform has become relative to incumbants. We are underwritten by RACQ Insurance, a top 10 insurance company in Australia with 1.8 million customers.

Leadership traits

“I think the three the most important ingredients to my success this far have been tenacity, an obsession with only working with exceptional people, and focus. Tenacity is important because building startups is about getting rejected 100 times for every 1 successful goal, exceptional people allow you to survive the hardships of the rollercoaster, and focus is critical because early-stage companies are always time and resource constrained so a lack of focus is a death wish.” Apart from being resilient, visionary, and a team builder, Rich loves to co-create new products directly with customers and he thinks it’s critical to live and breathe the problem you are trying to solve with the customer directly. “choosing the right problems to solve, and the most effective go-to-market strategy, are foundational to any business working in the long term” he maintains.

Overcoming fear of failure

“Failure is simply a perspective. I would argue all actions are positive because you either succeed, learn something that makes your skill set more valuable, or at least you help to move an idea forward so somebody else can continue to work. I see ‘failure’ as not having the courage to show up, and give it a shot”

As a successful leader, he urges insurance startups to be disciplined about their unit economics, in other words, make sure your lifetime value of a customer is at least 3x (and ideally 5x) the cost to acquire them. “I constantly see Insurtech companies not being honest about their long-term margins, or clear about how they can differentiate in a defensible way against incumbents. I’ve also come to realize that building an Insurtech is not about creating a technology company, but rather creating an insurance company that has digital leverage throughout all elements of the business. Ultimately, insurance is a highly regulated industry and even the claims experience has limits for how automated you can make it.”

Honey Insurance – Forging ahead

“Today we give qualifying customers $250 of smart home sensors at no cost, along with an 8% discount on home insurance if they use the technology since it reduces the chances of a claim.” The company is rolling out several new services in 2024 to give its customers additional support to avoid a claim and also repair issues in their homes when they come up. “We have achieved an NPS of 92 already which is the highest ever reported in Australia for customer satisfaction, and we are excited to release these new innovations to further improve this gold standard.”