..lame statements…Agree on that “The insurance policy is a good thing” but not In a way the traditional insurance does it selling you a fear based statistics instead prevention and protection by your own risk metered profile….sure Insurance people are good but Insurance is not. It sells a various products where only insurance gain….search “insurance company charitable giving” is good thing but it doesnt weight out first two points.
I think it’s reasonable to assume that most people distinguish between facts and marketing hype, except when prevented by their inherent bias to do so, as you did when deriving your “Implications” from Lemonade’s pitch. The result was a derogatory and unfair portrait of Lemonade. Of course there are “good” people within the insurance industry, and perhaps some “bad” people as well. But that has nothing to do with what Lemonade is all about. Lemonade is simply trying to offer a faster, easier, more transparent insurance experience than that offered via the traditional method. Many other insurtech companies are trying to do the same. To get in front they all have to engage in a bit of marketing hype.
Edward Kalbaugh
The biggest problem I see with Lemonade is that they are not actually trying to offer a more transparent process. In fact they are hiding some very significant parts of their business model.
Lemonade’s entire pitch is based on the fact that they 1. Do not care about profits since they are giving excess profits to charity and 2. Provide a better model cutting out the middleman or agent.
In reality, Lemonade has set up a brokerage entity that takes a 20% commission (higher than 15% industry standard) on all sales immediately off the top. This entity has no claims payment responsibility and the profits from this entity are not given to charity. This is clearly not consistent with the marketing pitch and makes the we area a not-for-profit so we don’t have an incentive to make money argument totally invalid. Not only do they charge more than a traditional agent but they do not offer any of the personalized advise.
Lemonade is not rated by any major rating agency. They are given an “A Rating-Exceptional” from Demotech. Providing killer prices and quick underwriting is easy when you do not have to meet any nationally recognized standard of financial stability. The most important part of an insurance company is their ability to pay a claims. Lemonades ability is unknown as it is not rated by a major rating agency. A large portion of lease agreements require an insurance company rated A- or better by AM Best. In those circumstances lemonade is basically worthless.
Renters insurance is absolutely a line of insurance that could benefit from a straight to market model that enhances transparency and eliminates the middle man. However, Lemonade is not that model.
I agree! Personalized advice from a Licensed Broker is extremely valuable. Most people admit that they don’t know much about insurance, so how are they going to choose the best coverages for themselves by just checking things off on an application themselves?
Patrick, I commend you for bringing some of these things to light. However, you have your job cut out for you, judging by some of the comments so far… keep casting the pearls out…
What are you talking about! I love Lemonade Insurance. Everything is done by a robot including paying claims. I have already told all my friends about it. It’s like an ATM machine! I buy a home policy with a robot, put in a claim and the robot deposits the check in my account quickly. Just like magic! AND I am sure that if I ever had something that is excluded from policy happen to me such as my Pitbull killing someone, they would cover me too because well, they have a BIG HEART! Now that is the insurance company we were all needing. Thank you Lemonade! I will be your customer forever.
..lame statements…Agree on that “The insurance policy is a good thing” but not In a way the traditional insurance does it selling you a fear based statistics instead prevention and protection by your own risk metered profile….sure Insurance people are good but Insurance is not. It sells a various products where only insurance gain….search “insurance company charitable giving” is good thing but it doesnt weight out first two points.
What?
I think it’s reasonable to assume that most people distinguish between facts and marketing hype, except when prevented by their inherent bias to do so, as you did when deriving your “Implications” from Lemonade’s pitch. The result was a derogatory and unfair portrait of Lemonade. Of course there are “good” people within the insurance industry, and perhaps some “bad” people as well. But that has nothing to do with what Lemonade is all about. Lemonade is simply trying to offer a faster, easier, more transparent insurance experience than that offered via the traditional method. Many other insurtech companies are trying to do the same. To get in front they all have to engage in a bit of marketing hype.
Edward Kalbaugh
The biggest problem I see with Lemonade is that they are not actually trying to offer a more transparent process. In fact they are hiding some very significant parts of their business model.
Lemonade’s entire pitch is based on the fact that they 1. Do not care about profits since they are giving excess profits to charity and 2. Provide a better model cutting out the middleman or agent.
In reality, Lemonade has set up a brokerage entity that takes a 20% commission (higher than 15% industry standard) on all sales immediately off the top. This entity has no claims payment responsibility and the profits from this entity are not given to charity. This is clearly not consistent with the marketing pitch and makes the we area a not-for-profit so we don’t have an incentive to make money argument totally invalid. Not only do they charge more than a traditional agent but they do not offer any of the personalized advise.
Lemonade is not rated by any major rating agency. They are given an “A Rating-Exceptional” from Demotech. Providing killer prices and quick underwriting is easy when you do not have to meet any nationally recognized standard of financial stability. The most important part of an insurance company is their ability to pay a claims. Lemonades ability is unknown as it is not rated by a major rating agency. A large portion of lease agreements require an insurance company rated A- or better by AM Best. In those circumstances lemonade is basically worthless.
Renters insurance is absolutely a line of insurance that could benefit from a straight to market model that enhances transparency and eliminates the middle man. However, Lemonade is not that model.
I agree! Personalized advice from a Licensed Broker is extremely valuable. Most people admit that they don’t know much about insurance, so how are they going to choose the best coverages for themselves by just checking things off on an application themselves?
Patrick, I commend you for bringing some of these things to light. However, you have your job cut out for you, judging by some of the comments so far… keep casting the pearls out…
What are you talking about! I love Lemonade Insurance. Everything is done by a robot including paying claims. I have already told all my friends about it. It’s like an ATM machine! I buy a home policy with a robot, put in a claim and the robot deposits the check in my account quickly. Just like magic! AND I am sure that if I ever had something that is excluded from policy happen to me such as my Pitbull killing someone, they would cover me too because well, they have a BIG HEART! Now that is the insurance company we were all needing. Thank you Lemonade! I will be your customer forever.
You told your friends it’s like an ATM machine?!? How many claims have you filed??? Sounds like poor front end underwriting on their part to me.
Mark, I’m pretty sure Einstein was being sarcastic.