HomeServe North America
Launched in 2003, HomeServe USA now have operations across North America and Canada
Total revenue increased by 16% to $436.2m
Net policy income increased by 14% to $396.8m
Total HVAC revenue grew 27% to $17.6m
Adjusted operating costs rose 12% to $348.1m
North America is now HomeServe’s largest business in terms of both customer numbers and adjusted operating profit, overtaking the UK. Customer numbers increased by 13% to 4.0m including 0.2m added following the successful integration of the second tranche of Dominion. US homeowners continue to be highly receptive to HomeServe’s products and 1.2m gross new customers were added in the year through annual marketing campaigns.
The policy retention rate remained high at 83% (FY18: 83%), and allied to a Better Business Bureau rating maintained at A+, is a good indicator of high customer satisfaction. The business was also honoured with 33 Stevie Awards for Sales & Customer Service and received a Grand Stevie Award, recognising HomeServe as the third most honoured organisation in the competition.
Utilities value the ongoing commission streams generated by partnering with HomeServe but they also value the high levels of service HomeServe provides to their customer base. This forms a key part of the proposal to win new partnerships. Successful business development led to an average of three new partners being signed every week and HomeServe North America now works with almost 700 partners with access to 60m households under a utility brand. The National League of Cities endorsement was renewed in the year and HomeServe also works with 16 individual State Leagues, bringing further endorsement at a more localised, State level.
HomeServe’s network of c.5k contractors and 453 directly employed engineers (FY18: c.4k contractors and 170 employees) completed 0.5m jobs in FY19, up 21% on the prior year. HomeServe provides a steady stream of work for its contractors and shares technology (job scheduling, job routing software) that improves their efficiency and service. Consequently there is high demand to join the network, but of all contractors applying only c.10% are approved; this means that HomeServe works with only the very best contractors who provide the excellent levels of service that HomeServe and its customers demand. The number of directly employed engineers increased as a result of the HVAC acquisitions in the year.
In January 2019 HomeServe made a strategic investment in consumer technology company Centriq, purchasing a 20% stake for $5m. Centriq’s app makes it easy for users to capture the details of items in their home, e.g. electronics and appliances simply by taking a photo of the product label. Having captured details, the app then provides users with resources to troubleshoot problems themselves, or with the details to obtain repair help and access to technicians when service is needed. A HomeServe branded version of the app will prove valuable in further engaging the existing 4.0m customer base and is a potential way to help acquire new customers.
Centriq is one of several initiatives to engage more customers digitally and to take advantage of technology that could improve the customer journey or increase operating efficiency. A smart IVR was launched during the year to enable customers to book tune-ups over the phone without agent intervention. This has proven to be a slick process for the customer and frees up agents to dedicate their time to providing high levels of customer service on more complicated calls. After its successful roll out in North America, the technology is now being introduced into the UK, France and Spain.
North America continues to lead on the Group’s HVAC strategy and acquired three new HVAC businesses in the year, of which Cropp Metcalfe in March 2019 was the largest. The acquisition nearly doubles HomeServe’s employed HVAC workforce and is the next step in building a share of the estimated $29bn annual HVAC market in the US. Cropp Metcalfe meets HomeServe’s criteria of a well-run, owner-managed business with a strong local reputation and will continue to provide its services to its existing customer base as well as now also providing installation services and repairs in an area (Washington D.C.) of existing high policy density.
North America performance metrics
|Affinity partner households (m)||55||60|
|Income Per Customer ($)||91||96|
|Policy Retention Rate||83%||83%|
North America performance metrics
|Affinity partner households (m)||50||55|
|Income Per Customer ($)||97||91|
|Policy Retention Rate||82%||83%|