Scout InsurTech Interview with Armadillo

Armadillo is a subscription-based home protection company. They cover the costs of repairs and replacements of major appliances and systems and coordinate service appointments. Chris Luiz sat with Co-Founder and CEO, Matan Slagter, to learn more about how Armadillo is impacting the industry.

Who are Armadillo’s clients?

We have two sets of clients: homeowners (including landlords with multiple units) who use Armadillo for home system and appliance protection, and business partners (e.g., real estate agents, brokers, title companies, mortgage companies and employers) who offer Armadillo as a benefit to homeowners or employees.

What does your product do?

Armadillo provides a service contract, not insurance, that offers financial protection for unexpected breakdowns in home systems (like HVAC, plumbing and electrical) and appliances. Members pay an annual or monthly fee, and we cover repair costs while providing access to a network of technicians, handling claims end-to-end from dispatch to payment.

How much capital have you raised?

We’ve raised a little less than $10 million to date.

Was your company born from within or outside of the insurance industry?

I come from the insurance industry, having been an actuary at AIG and a reinsurance professional. My co-founder also has experience in warranty and insurance businesses. So, while we didn’t start this within an established insurer, we are industry insiders.

What growth metrics have you accomplished over the last 12 months?

We’ve quadrupled our book of business over the past year.

Within your domain, what is the current challenge the industry is facing?

The home warranty industry struggles with brand perception due to issues from rogue players, which has led to consumer complaints and regulatory actions. COVID-19 also disrupted the industry, reducing real estate attachment rates and impacting distribution. Additionally, supply chain issues and inflation have increased costs and repair wait times, particularly for appliance parts like those for Samsung products. While conditions have improved, these challenges have significantly impacted the industry.

How does Armadillo take a unique approach to providing value?

We built Armadillo from scratch, focusing on consumer-friendly terms and addressing common pain points in home warranties. Unlike traditional InsurTech MGAs, we have more flexibility to draft contract terms that are innovative without the burden of filing those contract terms in all 50 states, allowing us to create a more flexible, transparent product. For example, we give homeowners the option to use their preferred technicians without special approval, with an automated reimbursement process. This consumer-centric approach distinguishes Armadillo as a modern, trustworthy alternative to traditional home warranties.

What inspired the team to start the company?

My co-founder had previously built a successful warranty business acquired by AIG, where we worked closely together. We recognized a market opportunity in home warranties, where our combined industry knowledge and network could give us an advantage. With strong capacity from insurance carriers lined up, we felt confident in our ability to execute and improve on existing offerings in the home warranty space.

Can you share any goals you have over the next 12 months?

Our goals include maintaining rapid growth, reducing our burn rate and enhancing unit economics to approach breakeven. Technologically, we’re focusing on deeper AI integration to automate claims processing. We launched our first automated claim for refrigerators in October and aim to expand this to other systems, like dishwashers and HVAC. These developments represent significant milestones in our journey.

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