Ondo InsurTech PLC (LSE:ONDO) chairman Mark Wood talked with Proactive's Stephen Gunnion about the latest expansion of the company's LeakBot technology across 16 US states through its partnership with Nationwide Mutual Insurance
Proactive: Hello, you're watching Proactive. I'm joined by Ondo InsurTech chairman Mark Wood. Mark, very good to speak with you. You've announced this morning that Nationwide Mutual has expanded your LeakBot into 16 US states. So really making strong progress in the US?
Mark Wood: Yeah, absolutely. We're delighted with this relationship. And of course, it builds on several other important contracts that we have in the US. I think we recently announced an increase in our production capacity, which is designed to provide the units that Nationwide will be deploying.
Proactive: So maybe we should take a step backwards, Mark; Nationwide first signed up with you a year ago. They started off with customers in Ohio, and it looks like the pilot program has really yielded strong results for them, which has encouraged them to move forward?
Mark Wood: Yeah, absolutely. I mean, this is a very typical pattern with each of the insurers we have. For example, Admiral and Direct Line here in the UK, Länsförsäkringar in Sweden, and Topdanmark in Denmark. And indeed, our very first insurer, Hiscox, who started off with a small pilot and then rapidly expanded when they saw the benefits that LeakBot brings.
In essence, once the device is installed, we identify whether there's a problem with water escaping somewhere in the household. And of course, intervene before that becomes a serious problem. But for the insurer, it means that once the device is installed, they know they’ve got leak-free properties that they're insuring, which enables them to bring the insurance premium down. Consequently, the insurer profits, but also consumers benefit as policyholders pay a lower premium.
Proactive: So, I mean, this is really a big endorsement for LeakBot, with Nationwide as a key customer, being a Fortune 100 company and one of the largest homeowner insurers in the United States.
Mark Wood: Yeah, absolutely. I think Nationwide ranks number eight in the US. And as you say, they're a Fortune 100 company. Importantly, Nationwide is known as an innovative user of technology in insurance. Their smart home program is an important element of their strategy, which is what attracted them to LeakBot.
Our product is unique worldwide and protected by global patents. Escape of water is the largest category of household claims worldwide. Every household insurer is more challenged by escape of water than any other peril, including burglary.
Proactive: And of course, the benefit for you also is there's no capital outlay because they make advanced prepayments before you deploy the technology. Is that right?
Mark Wood: Yeah. This is really the important point. We're a rapidly growing, listed fintech, and having this arrangement where each time we move into another state, we get an advanced order that anticipates the volume of deployments state by state. That advanced order is paid for in advance. So as the units are deployed, we draw down against that reserve, which enables us to fund the manufacturing costs and establish the infrastructure with no strain on our working capital. This way, we don’t need to go back to our shareholders to fund the expansion; the expansion is funded by the terms of trade we have with our customers.
Proactive: And your capacity to meet this increasing demand, Mark?
Mark Wood: Well, we announced ten days or so ago that we had increased our capacity with our UK-based manufacturing, essentially increasing capacity about four times. This enables us to accommodate the demands of Nationwide and our other big US customers, and also continue growth in Scandinavia, the UK, and Denmark.
I think we're pretty confident. Nationwide is a great partner from our point of view because they work with us to optimise the pace of the rollout to make sure we continue to deliver extraordinary service. The customer rating that we're achieving with Nationwide at the moment is 4.9 out of five on a Trustpilot-style scale. And we've got a Net Promoter Score deep into the 80s, which is really unheard of for insurers generally. So this is a huge success.