Giveback is the certainty that your money is being used wisely
Let us explain what usually happens with other insurance companies:
- Traditional insurers collect contributions each year from a large community of people to reimburse the few unlucky people who will suffer a loss during the year.
- Since it is impossible to predict how much money will be needed to cover these damages, the monthly payments of the contracts are set to cover more claims than the ones that actually happen. So, some years, there’s money left in the insurance's fund 💸
- This money is invested on the market, which allows insurers to generate revenue.
We see a problem in this: When insurance works that way, paying back the insured for their claims is contrary to the insurer’s interest. Their interest is to keep as much money as possible, to make it grow. That is not compatible with the values we want to stand for.
Giveback is a vow of transparency
At Luko, we believe there is a better solution: instead of keeping this remaining money, we give it to associations. This allows us to be more transparent with our policyholders, and to have a real positive social impact.
Here’s how we use your payments:
- 30% of it finances the management of Luko as a company : the development of protection technologies, customer service, our office, our salaries ...
- The remaining 70% is dedicated to the reimbursement of claims. One part is placed in a fund, that is common to policyholders who have chosen the same association as you. The other part allows us to be reinsured with the largest reinsurance companies. This ensures that we will always be able to reimburse claims.
What happens at the end of the year with the money that was not used to pay the claims ?
- That's the good news ! Since Luko does not keep this money to make a profit, we have no interest in not paying you back or dragging out refunds. That's why we do our best to pay you back quickly and well in case of damage. And we donate the remaining money to the chosen association. It never stays in our pockets.
- What about the bad years? Don’t worry, thanks to our reinsurers (Munich Re and Swiss Re, the world’s two largest reinsurers), we are sure that we will always be able to reimburse our policyholders. Yes, even if all our insured have a disaster of exceptional magnitude on the same day.
👉 Why did we choose the Giveback?
Because it allows us to put an end to conflicts of interest, while transforming the insurance to put it at the service of the society 💙