HomeServe shows that the difficult US market can be cracked 

By Content Director Saxon East


Saxon East

Some of the giants of UK insurance, such as Aviva and Admiral, have tried to crack America without much success.

But a lesser known UK company, HomeServe, is having some real success.

Its six-month profits, reported this month (December 2021), have surged on the back of growth in the US market. 

Operating profits, for example, were up 51% to £32.1m in a strong performance.

The home repairs and improvements business’ chief executive, Richard Halpin, said the US market remains ”relatively untapped” and US consumers tend to be more insurance-minded than their UK counterparts.

The firm has 4.2 million US customers, with a rock solid 82% policy retention.

Opportunities across the pond

Where HomeServe has made a success, others have struggled.

Admrial is struggling to make a success of its US operations. 

It is still making underwriting losses - despite the insurer’s combined ratio improving from 118% in 2017 to 103% last year. 

Aviva, meanwhile, sold its US life business in 2013. It struggled to gain scale. 

Competition is fierce in the mature America market and startup costs to gain scale and recognition are high. 

Another hurdle in the US is regulation. Different states have their own regulatory requirements.

This means that foreign insurance companies entering the market have to take America state by state. It is a long and onerous challenge, unless they make a major acquisition, which is costly.

Perhaps the best opportunities are for smaller insurance partner firms, which have less regulatory and capital requirements. 

As HomeServe is showing everyone right now.