Australia’s latest insurtech launched last week, aiming to shake up the home and contents market with $15.5 million in financial backing from its underwriting partner RACQ and other institutional investors.

Honey Insurance is the brainchild of founder and CEO Richard Joffe, who came up with the idea after moving here in 2019 from the US.

He says his experience buying insurance in Australia transported him back to 30 years ago, with the process slow and unsophisticated. According to him, insurers in Australia are not customer-centric and not utilising data effectively to improve customer experience.

“We want to use technology and services to truly reduce risk in people's lives and blow them away compared to what they are used to,” Mr Joffe told insuranceNEWS.com.au.

“It took two years to investigate the idea, to speak to local underwriters, to speak to potential partners who are also customer-centric, to study the international market to understand what would or wouldn't work here.”

He says Australians “deserve a sweeter deal,” which is why he has named the insurtech Honey Insurance.

RACQ, which has an insurance arm offering car, home and other lines, says the investment and underwriting partnership with Honey is complementary to its business offerings.

“RACQ is pleased to be partnering with Honey Insurance as it innovates, helps customers reduce risk in their lives, and delivers peace of mind,” RACQ Group CEO David Carter said.

“Investing in Honey Insurance is an opportunity to share in the innovation and increase the scale of our insurance portfolio to benefit our 1.8 million members and their communities.”

According to Mr Joffe, Honey is looking to achieve $500 million to $1 billion in premiums in five years’ time, or 10% market share.

The business currently employs 20 staff who are all based in the Sydney office and is looking to expand to 100 employees after a year.

Honey currently offers products for homeowners, renters and landlords.

Mr Joffe says Honey differs from rivals, including incumbents, through its heavy emphasis on using technology to reduce a customer’s potential risk exposure.

Home insurance customers will receive smart sensors to detect preventable incidents such as fire, water damage and theft.

“At Honey Insurance we invest in our customers by giving them smart technology for the simple fact that 50% of insurance claims are avoidable,” Mr Joffe said.

“We believe providing protection upfront is just as important as being there for them in the event of a claim.”

Home insurance customers can potentially enjoy premium savings of up to 8% every year if they keep the sensors turned on, Honey Insurance says on its website.