Why Slingshot has gone into the home & contents insurance business

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Slingshot has long bundled power with broadband. Now the ISP has added home, contents and landlords' insurance too.

The company says for each insurance policy you take out, it will knock $5 off your broadband bill for savings of up to $120 per year.

"Slingshot Insurance" is being offered through a partnership with Open, a relative newcomer that raised $30.7 million last year in a round lead by Wellington-based Movac. The VC firm invested via its Movac Fund 5, which includes a $30m investment from the NZ Super Fund via its Elevate vehicle.

Open has built a white-label platform that can be adopted and rebadged by companies who want to offer insurance.

The policies are underwritten by a more traditional player: Tower Insurance, which Slingshot chief consumer officer Taryn Hamilton says will help with trust.

Hamilton hopes that Open's fully-digitised platform will appeal to punters, given many insurance companies still require phone calls or paperwork for some claims.

More broadly, bundles are seen as good for stickability. The more services you have in one bundle, the less likely you are to go to the hassle of changing one - and the more chances a provider has to offer discounts tied to loyalty programmes.

Sky TV, for example, has reported lower churn since it introduced its new broadband service early last year.

Hamilton says Slingshot is the first ISP to offer bundled broadband, power, mobile phone service and insurance.

Slingshot's mobile service is currently provided via a wholesale deal with Spark.

When Slingshot's parent Orcon Group merged with 2degrees, in a $1.32 billion deal that closed on May 20, chief executive Mark Callander said the "mobile virtual network operator" (MVNO) deal with Spark would be phased out in favour of 2degrees' service, as expected, but that with around 40,000 customers involved, it would take some time.

More bundling is on the way, now that 2degrees and Orcon Group are merged (their official launch date as a combined business, trading as 2degrees, was June 1).

Orcon Group bought its power retailer Switch Utilities in 2017, and used it to launch Orcon Power and Slingshot Power for its fixed-broadband customers.

Callander says there are now plans in the works to extend electricity bundles to 2degrees' 1.5 million mobile customers, and all of the groups' broadband customers, who now total around 345,000.