Fintech Genome

Do you agree with me that insurance will never be the same again now that Lemonade have gone live?


#1

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My thoughts on the launch of Lemonade Inc


#2

@RickHuckstep good to see you here and interesting that the Lemonade stealth period is finally over. The world can now see if it gets traction with customers. This video is accessible and answers some questions - The Science Behind Lemonade – https://www.youtube.com/watch?v=6U08uhV8c6Y
My takeaways

  • home owners and renters
  • public benefit corporation
  • eliminate brokers using AI

Just direct is a big deal - look at Geico or Progressive in Auto.

Direct is new in Housing AFAIK. That alone makes it a big deal.

A deal with AirBnB should be next step. Lots of motivated home owners there.


#3

It’s a lot more than that Bernard. The most significant (of a list of significant characteristics) is that they don’t profit from withholding a claim.

This fundamentally changes the business model.

Lemonade take a flat fee of 20% of gross written premiums. They make their profit or loss from the fee.

The 80% of premiums remain to settle claims. It’s no skin off Lemonade’s nose if they pay out or not. Any surplus premiums are given to a good cause chosen by the policyholder.

You could add a fourth bullet point…

  • Fundamentally aligns the interests of the insured and insurer

#4

I just watched the Science Behind Lemonade and the App demo. There has been so much hype about the Lemonade launch over the past months – this is the real deal. A few additional points that stood out for me:

  • It’s well-known that Millennials are under-insured - what a smart move to make renters part of the V1.0 offering - an easy to understand, basic insurance product to bring a receptive audience into a relationship with the brand.
  • Lemonade has broken the win/lose basis of traditional insurance. In my work within the industry, speaking with people who own or seek to buy insurance, it’s not uncommon to hear people literally say, “when I win they lose.” Or vice versa. Aligning interests between the person buying insurance and the insurance carrier reframes the relationship, can reinstate trust, and gets back to the original idea behind insurance – pooling funds so members of a community can care for each other.
  • Love the Intelligent use of UX + Data + Virtual agent to have a truly personalized, relevant conversation that results in giving the person something they need, in easy to understand terms. This is surely an exemplar that will be studied – with attempts to imitate – within insurance and beyond. But putting ‘lipstick on a pig’ won’t work. The fact that Lemonade has been built from the ground up will make imitation hard.

A stat shared at a conference I recently attended: 70% of millennials would rather do business with Google, Facebook, Amazon than a traditional FI. Insert “Lemonade” in that sentence.

BTW also note that Lemonade is powered by one of the most renowned behavioral economists in the world, Dan Ariely.

Kudos for a true disruptor having the tenacity and focus to make a statement about what insurance can be. I’ll be shopping as soon as they offer coverage in my state!


#5

What happens when claims are greater than 80% of premiums?