HomeServe UK

HomeServe was set up in 1993 as a joint venture with South Staffordshire Group by HomeServe founder and current CEO Richard Harpin and has since gone from strength to strength.

 2018 stats

Customer numbers stable at around 2.2m customers
Customer focused culture, good levels of satisfaction
Driving innovation with launch of Leakbot
Developing a heating business with acquisition of Help-Link in August 2017

Operational performance

As HomeServe’s most developed business, the UK is highly cash generative and the largest contributor to the Group’s operating profit. It has made good strategic progress in FY18 with further investment in growth opportunities including LeakBot and boiler installations. Through affinity partner relationships, HomeServe offers home assistance products, under a utility brand, to around 90% of the addressable UK market. One of our largest affinity partnerships was successfully renewed in the year and we were also pleased to sign a new partnership in July 2016 with Dee Valley Water, which provides water services to over 250,000 customers.

Adjusted operating profit of £61.1m (FY17: £63.2m) was down on the prior year, having incurred a one-off cost of c. £2.5m as headcount was reduced as part of an ongoing drive to reduce complexity and introduce further efficiency into the UK operations.

UK customers totalled 2.2m at year end, reflecting a retention rate of 79% (FY17: 80%) and 0.3m new customers added through marketing campaigns (FY17: 0.4m). Included in the year end total are 0.1m customers who are expected to transfer to HomeServe over the course of FY19 following the acquisition of the AA’s home emergency services policy book. This acquisition also saw 70 AA plumbing and gas engineers move over to join HomeServe’s 1,000-plus strong national network of directly employed engineers (FY17: 850 engineers), further strengthening HomeServe’s position in the UK Home Assistance market.

The value of HomeServe’s UK customer base is increasing, with customers taking advantage of more cover, with a resultant 10% increase in income per customer and average policies per customer up to 2.7 (FY17: 2.5).

New affinity partnerships were agreed in the year with E.ON and Octopus Energy. The partnership with Octopus is an opportunity to work with an innovative challenger in the energy space and there is great potential from partnering with E.ON to market products to their customers. Both partnerships offer an opportunity to expand beyond the UK’s traditional base of water utility partners.

Customer satisfaction remains very high, as evidenced by strong scores on independent sites such as Reevoo (95%) and Trustpilot (8.2), (FY17: 93% and 8.3 respectively). The ability to use products effectively when customers most need HomeServe is critical to maintaining high satisfaction. In FY18 the UK network completed a record number of 1.2m jobs, up 12% on FY17. On average the UK network was in a customer’s home once every 26 seconds. There is a strong correlation between staff engagement and customer satisfaction, which is why it was important to HomeServe to have maintained its Top 10 position on Glassdoor’s Top Places to Work.

Customers are increasingly choosing to interact online. Investment in the core customer management and claims systems has supported this, together with the launch of a new customer App. The ability to enrol, manage and claim online aids efficiency in the business, provides alternative solutions for customers and alleviates pressure on contact centres during times of high volumes – as happened at the end of FY18 with the extreme cold weather. An increase in the ability to provide claims solutions over the phone or by helpful hints and tips on the website also has the potential to provide remedies for customers who are happy to be guided through ‘selffix’ steps to fix common plumbing or heating problems.

The acquisition of Help-Link Limited in August 2017 expanded HomeServe’s boiler installation resources and formed an end-toend heating business encompassing installation, assistance cover, service and repair. Of the one million domestic boiler installations in the UK every year, the vast majority are undertaken by local and regional tradespeople. There is significant opportunity for HomeServe to gain market share and offer customers access to a local tradesperson, combined with the scale and expertise of a national network with a wider choice of complementary products including smart thermostats.

There was good progress on Smart Home with LeakBot, HomeServe’s smart water leak detector. Additional investment was made in the year to support the development and launch of a WiFi version that will facilitate broader coverage and appeal and enable a faster roll out. Further test agreements have been signed with a number of other insurers and the first sizeable orders agreed with partners in Denmark and the UK.

The 100% investment in Checkatrade presents additional exciting opportunities for synergies with the existing UK business, particularly around heating, which will be assessed and pursued throughout FY19.

UK performance metrics

FY17 FY18
Affinity Partner Households (m) 24 26
Customers (m) 2.2 2.2
Income Per Customer (£) 96 106
Policy Retention Rate 80% 79%
Policies (m) 5.6 5.9

UK performance metrics

FY17 FY18
Affinity Partner Households (m) 24 26
Customers (m) 2.2 2.2
Income Per Customer (£) 96 106
Policy Retention Rate 80% 79%
Policies (m) 5.6 5.9