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Using Analytics to Disrupt the Home Insurance Industry
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Using Analytics to Disrupt the Home Insurance Industry

Using Analytics to Disrupt the Home Insurance Industry

A French startup is leveraging its modern data stack to overturn a longstanding business model.

By Ciara Roca, July 14, 2021

In May, the Modern Data Stack Conference EMEA showcased how companies use next-generation analytics to power innovation and become more competitive. French home insurance company Luko shared how it used its modern data stack to develop an entirely new business model and disrupt the industry.

In the traditional home insurance model, insurers boost earnings by limiting how much they pay out on any given claim. Luko, by contrast, focuses on helping customers take better care of their homes and reducing the total number of claims. “Instead of simply fixing the problems, we want to be able to prevent them,” explained Pie-Loup Pecorari, Data Analyst at Luko.

Modern data collection and analysis are absolutely critical to Luko’s approach.

Data Pipelines Fuel Continuous Innovation 

Luko’s promise to protect and care for households relies on a combination of services that all depend on data. “From the beginning, data has been in our DNA,” said Rimane Toumi, Data Scientist at Luko. “We rely on it to provide the best services and the best possible customer experience.”

The business case for a modern data stack was easy to make because Luko’s core business proposition is directly linked to its many data sources — from finance and claim management to customer support and IoT devices. “Without centralized data, some reports took days to build and insights were simply not accessible to end users,” recalled Toumi.

A correlation between data and innovation was evident in the business from the outset. Constantly launching new services, the company depends on quick and scalable data pipelines to measure effectiveness and improve performance. “Without an efficient data stack — an ingestion tool, a centralized data warehouse, and efficient transformation and visualization tools — this wouldn't be possible,” said Toumi.

A Single Source of Truth Improves Decision-Making

For the first time, everyone in the company has easy access to the same data, and it is far more reliable and up to date than before. This has reinforced trust across the company, with people in different parts of the business aligned on goals and making decisions based on the same data.

“Each team now has a clear vision on how well they are doing — they are not blind,” said Toumi. Claim managers and customer support now know how well they’re performing each day, and global results are communicated more effectively to the C-suite.

Surfacing insights has been so successful that the data team had to learn how to manage stakeholder expectations and focus on what matters most. “As soon as they saw how powerful it is to be able to link all the data, they wanted more and more,” said Pie-Loup Pecorari. “So it was really key to be able to understand what the needs were, knowing that you have great tools to support most of the requests that come in.”

Shaking Up Home Insurance — and Sharing the Wealth

Luko’s modern data stack has enabled it to grow, scale and innovate, and the combination of Fivetran connectors and transformation tool dbt has been particularly useful. Luko doesn’t have any data engineers, so ingestion and transformation must be as simple and automated as possible. “When you know how to use dbt, it's really easy to collaborate between analysts,” said Rimane Toumi. “You don't need to be an expert in engineering.”

Linking data from different sources in the data warehouse has been vital, enabling rapid insights into the success of different services. Luko’s data stack has also simplified the time-consuming process of calculating “Giveback,” its practice of giving unclaimed money to charity at year’s end. “We have everything we need to automate the process and can almost forecast the reimbursement of claims in real time,” said Pie-Loup Pecorari.

A sign of how well things are going was when last year’s Giveback total was calculated at €100,000, which took the business by surprise. “After only three years in the insurance business, we did not expect the amount to be so large,” said Pecorari. “All of this makes us really excited about the future and the contribution we can make to charities, society and our customers — just by realigning the insurance industry.”

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