Lemonade Insurance is changing the ill-perceived notions that consumers have of the insurance industry. Using a fresh approach to create a more customer-centric and innovative business model, Lemonade Insurance offers more affordable and socially responsible choices for renters and homeowners.
Lemonade Insurance’s business model is powered by the latest technologies in AI and machine learning to create insurance policies and handle claims processing, which takes the place of working with insurance brokers as well as reducing the time it takes to process a claim. Using a smart phone and Lemonade’s app, customers can instantly sign up for new policies, and they can also file a claim in as little as three minutes.
Lemonade’s strategy enables the company to offer affordable rates of which the company retains a flat fee of 25% from the premiums. The remaining balance is used for paying any claims throughout the year. Customers can then donate the unused portion of their annual premiums, to several charity organizations that Lemonade Insurance works with as a part of their Giveback operation.
Giveback consists of several non-profit organizations that are chosen by Lemonade Insurance as recipients. Charity organizations like the Robin Hood Foundation, American Red Cross, Feeding America and the Make-a-Wish Foundation are just some of the charities that Lemonade’s customers can choose as their beneficiaries.
Schreiber and Wininger designed Lemonade’s platform using behavioral science to eliminate fraud and deception while promoting transparency and social accountability. It is clear in the company’s mission statement, which speaks of transforming insurance from a necessary evil into a social good. While traditional insurance companies keep the unused portion of premiums as profits, Lemonade only keeps their flat fee, for business operations and uses the rest for paying claims and Giveback donations.
Lemonade is a digital insurance startup that has focused on the vast market of financially-savvy millennials who are now either renting or buying homes. The company is backed by many well-known investors, including GV, Sequoia Capital, Sound Ventures and Softbank and now has an estimated working capital of nearly $200 million. The company underwrites its own polices, and they are an intermediary of Lloyd’s of London. In 2016, LemonadeInsurance received an A-Exceptional rating in financial stability, from the Ohio-based firm, Demotech. They are also the only insurance company to have meet the stringent requirements for B-Corp certification.
Lemonade Insurance was founded by former President of Powermat, Daniel Schreiber and Co-founder of Fiverr, Shai Wininger in 2015. The company is based in New York City and currently offers Home and Renters insurance services in Arkansas, Arizona, California, Connecticut, Washington D.C., Georgia, Iowa, Indiana, Maryland, Michigan, New Jersey, New Mexico, Nevada, New York, Ohio, Oregon, Pennsylvania, Rhode Island, Texas and Wisconsin.