Power company AGL is investing $3 million in Honey Insurance and offering the insurtech’s products to customers building a new home, or renting.

Honey launched in June targeting the home and contents market after securing $15.5 million in seed funding from underwriting partner RACQ and other institutional investors, including AGL, builder Metricon, Afterpay co-founder and CEO Anthony Eisen and Airtasker co-founder Tim Fung.

AGL provides services to around 28% of Australian households and offers the startup “incredible scale,” Honey founder and CEO Richard Joffe says.

“We couldn't be happier to have a more aligned partner to be our first to market with,” he said. “This is only the beginning of many unique and joint offerings to come.”

AGL customers will access Honey Insurance via home moving business Connectnow.

Honey, which offers products for homeowners, renters and landlords, aims to achieve $500 million to $1 billion in premiums in five years' time, or 10% market share. It is looking to expand to 100 employees, from 20.

Honey’s offering incentivises policyholders to make use of smart home technology, including sensors that can proactively detect preventable incidents such as fire, water damage or even theft.

Mr Joffe, who co-founded two start-ups in the US, says he came up with the idea to launch the insurtech after moving Down Under in 2019 and seeing a need for improved service. Australians “deserve a sweeter deal,” he says, which is why he named the insurtech Honey Insurance.

Executive GM Future Business and Technology John Chambers says AGL was seeking to invest in businesses offering technology that made life easier for customers.

“We have seen the success of smart home technology overseas and believe that it is an untapped and growing market here in Australia,” he said.

RACQ has said investing in Honey Insurance is an opportunity to increase the scale of its insurance portfolio to benefit its1.8 million members, while at AGL, Chief Customer Officer Christine Corbett says the team is committed to simplifying the broad customer experience.

“We are taking away the hassle of calling several providers by streamlining customers’ essential services and becoming the one place for energy, broadband, mobile - and now insurance,” Ms Corbett said.