HomeServe North America

Launched in 2003, HomeServe USA now have operations across North America and Canada

  2018 stats

HomeServe North America is the market leader

Access to 55m households under a utility brand

Strong pipeline of new partner opportunities

Largest ever acquisition – the policy book of Dominion Products and Services Inc. (DPS) in October 2017

Operational performance

North America is HomeServe’s largest current opportunity. FY18 saw an outstanding performance as continued double digit organic expansion was supplemented by strategic M&A to accelerate ambitious growth plans. Adjusted operating profit more than doubled to $64.4m, demonstrating the ability of the business to scale and integrate its growth opportunities efficiently.

The North American business continues to go from strength to strength with a proven track record of strong organic growth supported by the successful integration of acquired policy books. This year Utility Service Partners Inc. (USP) and the policy book of Dominion Products and Services Inc. (DPS) have both been efficiently interfaced with existing systems and processes, bringing a key step up in operating leverage and increased margin traction.

Customer numbers increased 20% to 3.6m (FY17: 3.0m). Customer satisfaction remained very high and was reflected in the strong retention rate of 83% (FY17: 82%), and successful marketing campaigns added 1.0m gross new customers (FY17: 0.8m). Double digit organic customer growth of 11% was further enhanced by HomeServe’s largest ever acquisition; the policy book of DPS.

The purchase of the DPS policy book was announced on 19 October 2017. It brings a total of c. 0.5m customers and marketing opportunities to c. 7m households, for a total enterprise value of $143m. It is structured to complete in two tranches. The first tranche completed on 18 December 2017 and delivered an initial 0.3m customers. Tranche 2 is expected to complete in Autumn 2018, bringing the remaining 0.2m customers. DPS is a highly complementary policy book and marketing has already commenced utilising the Dominion Energy brand to 4m households under tranche 1. The second tranche is expected to bring an additional 3m households and further marketing opportunities with Dominion Energy’s own partners.

Total affinity partner households increased to 55m from 50m in FY17 as HomeServe signed an average of two new partners every week, a total of over a hundred new partners for the year with access to around 10m utility households (including tranche 1 of DPS). HomeServe now works with a wide portfolio of almost 550 water, electric and energy utilities and municipals.

It is inevitable that as the number of partners continues to grow, HomeServe or a partner may choose not to renew or extend agreements as circumstances and corporate priorities change. The large portfolio now present in North America ensures that there is no over-reliance on any one partner. During the year the partnerships with Duke Energy and AARP ended with the removal of 5m households from the household count but with no change to our growth expectations.

The pipeline of potential partner opportunities remains strong and HomeServe remains confident of increasing its number of partners throughout FY19. The National League of Cities (NLC) relationship that was acquired with USP has been renewed and its endorsement and support will continue to play an important role.

The existing Membership customer base offers great prospects for HomeServe to market its installation products. Total HVAC installations in the year increased 15% as HomeServe installed furnaces and boilers to meet the wider needs of the customer base beyond simply providing emergency repairs.

The team in North America was recognised with 18 awards at the annual Stevie Awards for Sales & Customer Service, including 3rd place overall, rewarding its focus on delivering great customer service.

HomeServe has continued to invest at various stages of the customer journey to further improve the customer experience. Digital channels experienced the largest growth in FY18 with even more customers now choosing to join online. Other technology initiatives such as new field management software have enhanced the operational efficiency of the network and further improved engineer attendance, ensuring customers receive visits at the appointed time. The network of 170 directly employed engineers and over 1,300 sub contractors completed 0.4m jobs, up 12% on FY17.

The Connecticut head office was once again recognised as a Top Place to Work and investment in a new contact centre in Chattanooga will greatly improve staff engagement and establish a hub for customer service excellence. Having begun in Chattanooga with just 35 employees in 2010, the new facility with 350 employees officially opened on 25 April 2018 and is a great indicator of the progress made by HomeServe in North America in less than a decade.

North America performance metrics

FY17 FY18
Affinity partner households (m) 50 55
Customers (m) 3 3.6
Income Per Customer ($) 97 91
Policy Retention Rate 82% 83%
Policies (m) 4.5 5.6

North America performance metrics

FY17 FY18
Affinity partner households (m) 50 55
Customers (m) 3 3.6
Income Per Customer ($) 97 91
Policy Retention Rate 82% 83%
Policies (m) 4.5 5.6