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Lemonade — Forget everything you know about insurance
Lemonade Insurance Company is a licensed insurance carrier, offering homeowners and renters insurance powered by artificial intelligence and behavioral economics.
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another unquantifiable (worse, provably false) tagline: "The World's First P2P Insurance Company"
um, except companies that were doing this since 2010: https://en.m.wikipedia.org/wiki/...
why do companies feel the need to embellish things by saying they're the "world's first", "only company doing x" or "best x"?
@_jacksmith Jack, it's a fair point. In some ways P2P insurance has been around for thousands of years! However, in the sense in which it is being used today (fintech, technology based) I think we are the first insurance COMPANY. Others are brokers, using traditional insurers as the underlying insurance company. Lemonade is different, we're actually a licensed insurance carrier. That is a first and I guess we're pretty proud of it! Owning the whole stack allows us to offer an experience that is very different (much harder to do if you're just a broker). Don't mean to bluster, but do want to draw people's attention to the differences.
@daschreiber "thinking" you're the first isn't a justifiable reason to lead with that as your tagline imho. It's a shame, as I think what you're working on looks fantastic, I'd definitely use it when it's in SF. I just feel that having something like that as your tagline makes the company seem less credible.
What an interesting model - and impressive launch in all respects! So the regulator won't allow you to give the excess premiums directly back to policyholders? Did I understand that right from the TC story?
And do you expect the causes to be significant marketing channel?
@mickwe We'll work on getting the unclaimed money back to policyholders, but it's not yet recognized by the law! In the meantime, the 'Giveback' lets policyholders to choose causes they believe in and empower them- bringing insurance back to what it used to be- about community!
Good luck Shai and team. The execution on setup and overall UX is flawless! And to think, for an insurance company. New day.
I love everything about Lemonade, huge yet simple problem, elegant solutions, B-corp, whats not to love? I'm totally waiting for you to start operating in Boston.
It's hard to look at insurance and get excited, and then Lemonade launches and you say, what? How's that possible? Awesome job guys :-)
Big launch of an awesome new #insurtech company today - they're on a mission to change the insurance world - @shai_wininger & co can tell you more!
I'm the most curious about the math of this. You take 20% of every premium collected. That itself is a model that'd be interesting to see the details of - eg, how that 20% is spread out to cover your expenses, and what profit is left.
But that aside, what % do you anticipate to go to claims, and what % to anticipate to be left over?
I assume in theory you'd like to target 0% going to charities - not because anyone is anti-charity, but because if there's money left over, then premiums were too high. Is that correct? As a way of "getting around" the law that you can't give excess back to customers, why not just keep the excess as cash on hand and purposefully lower premiums the next year recognizing you have excess cash to cover losses?
@jeremyz123 It's a tough question to answer with certainty, but we have modeled these things as best we can. The models predict about 15% (give or take) going to charity, though it will vary from group to group and year to year. In terms of why we're giving it to charity, part of the thesis is that people feel entitled to embellish claims (25% say so to pollsters) and that this creates artificially high claims ratios. Knowing over-claiming is impacting a cause you believe in, rather than an insurance company you don't, creates a self-fulfilling dynamic where people claim more responsibly and therefore charities get more.... See Dan Ariely's comments here https://youtu.be/6U08uhV8c6Y
Morning Hunters...
I want to introduce you all to Lemonade, the world’s first full-stack insurance company that is powered by bots, stunning design and a good heart. We ditched agents and paperwork, and built an entire insurance company from the ground up to provide users with an experience that’s fit for the 21st century. We wanted to make insurance instant, smart, honest and delightful.
But wait, that’s not all. We’ve discovered a way to hack how insurance works!
It turns out that on average, about half of the money we all pay insurance companies actually goes to cover for claims. The rest is taken for their expenses and revenues. Now, this is a big deal. It means that insurance companies earn more when we’re paid less (or slower), and explains why so many people have terrible experiences around claims.
By design, insurance companies hate to pay because it hurts their bottom line.
Lemonade works differently. We take a flat fee upfront, pay for claims and expenses, and give back everything that's left to causes our users pick. Doing this steers us away from that conflict, and when claims come, we’re happy to pay them fast because it doesn’t affect our revenues.
This is why we’ve taken on the challenge of building a full stack insurance company (which is fucking hard btw). Starting fresh was the only real way to break the vicious cycle of people not trusting insurance companies and companies not trusting people.
Give us a try! I’d love to hear what you think.
Shai Wininger
Chief Lemonade Maker
(The Lemonade App is available for iOS and Android)
@shai_wininger In which countries do you operate? Also, what happens to the accounts if your company shuts down (kudos btw, it's not an easy task and this is a field ripe for innovation :)
@haimpekel we've launched NY and will gradually be rolling out additional states soon. As to your second question - insurance companies have to go through strict regulatory compliance process to make sure they stay solvent. In any case, we're financially rated A-Exceptional and are backed by the biggest reinsurers in the world such as Lloyd's of London, Berkshire Hathaway National Indemnity and XL.
@shai_wininger This is so refreshing to see. And finally, a gamechanger on Product Hunt. This should encourage more developer/founders here to turn their considerable talents into much bigger things than I generally see here.
@shai_wininger Why pay out the extra to causes? Why not keep for a black swan event?
Congrats! I'd love to know more about how you validated and did customer development. Getting people to trust non-human is a big step, especially for insurance!
@stinhambo thanks for your support Steven. That's a topic for a long blog post (that we'll eventually release). To sum it up, we did a lot of user testing.
Congrats, It looks great! Also, the website is amazing, props to your design team :)
Looks great, but I don't see how you can claim to be the first P2P insurance company in the world. Guevara in Germany, etc.
@skunkwerk thanks. Guevera is an insurance broker. We're a fully regulated insurance company. It means we can really control the user experience and delight consumers, as opposed to brokers, MGAs etc. who are highly dependent on the insurance carrier that takes the risk.
Love how you guys are turning insurance into a subscription as easy as Spotify! Congrats!
Only home insurance and renters insurance currently, and only in New York. Any plans to expand to other types of insurance and other locations?
@joshdance sure things. We'll expend to more states soon and most likely add new products as we go. Stay tuned :)
Prosper