This reminded me of a new homeowners startup carrier in Florida a few years back where the owner’s initial marketing and advertising was pretty much the same “we’ll cut off the agent, go directly to you and save you money”. Well, it didn’t take very long for the owner of this carrier to realize “… maybe not offering our products through the independent agency channel isn’t such a good idea after all…”. Will be interesting to see two years from who wins, Lemonades’s robots or capable independent agents.
So if I understand this correct, they have collected $14,000 in premium, take a “fee” which is also known as commission, and promise to donate any “excess” to a charity based on the groups decision. Wouldn’t one $20,000 loss today wipe out any “excess”. We have non-profit insurance companies already, they are called Mutuals and they return the “excess” to the policy holder via dividends, safe driver, or rate relief. Marketing a promise to donate excess does not sound very actuarially sound, but I’m not a bot.
I think you’ve pretty much covered everything; they have a cute name & the business model sounds gimmicky. I’m especially not in favor of unknown persons donating the “excess” to a charity chosen by supposedly a consensus of customers, so then the business takes the write off for the charitable contribution. The customer would be better off to make their own donation to the charity of their choice and take their own write off.
They keep only the transaction fee, that’s not widely done. They are cutting out brokers and using bots, which is innovative when combined with the machine learnt use-also unique. Most insurers are loaded with people who can’t even use Excel beyond in a rudimentary way. They are drastically different there, although it’s going to be a while before we know hiw well it works. The best ideas are pointless if they aren’t implemented correctly. They also pay claims almost instantly for many things which eliminates the biggest complaint people have with using insurance. They could face more fraud, but that’s yet to be seen.
The only reason ins companies have a delay is to ensure there isn’t fraud. Can’t imagine their reinsurer is accepting such risk meaning they will absorb the inevitable
This doesn’t make sense. It says GWP of $14,000 and 142 policies which is $100.70 a policy, het the average homeowners is $1,042. They must have written just one homeowner policy.
They want to be innovative in the insurance industry. I wouldn’t call getting people who may not be insurance literate to buy coverage online innovative. Most people don’t understand insurance and what limits to buy. Good luck when the claims start rolling in. They’ll be digging into that $34 million investment in no time.
The article is poorly written. According to the article it links to the average in the first 48 hrs was about $86 for renters, $528 for condos, and $691 for homeowners, the average they list here is actually for the first 2 weeks.
If the people buying insurance are ignorant and limits and coverage don’t you think they would be more likely to have uncovered losses than to start digging into the startup funding?
This company will be out of business within a year, mark my words. They came into the marketplace at a 1/3 of the price of the current renters insurance market and they promise to pay your claim within 5 minutes of filing it via video conferencing.they will most certainly get the bulk of the fraud market headed their way and this will wipe out their reserves very quickly.
Yeah we saw this before in California with 20 Century cut out the agent cheap price until the claims come in then they went broke and we got all our business back. I can’t wait to see how the Bots are going to handle claims, (instantly) you have got to be kidding. And shame on the Big time Insurance execs exhorting this concept, and by the way these execs got to be who they are on the back of the Independent agency system.
Hoo boy! They’re going for the “high dive” diving board, aren’t they. I hope the pool has water in it or that it isn’t filled with sharks, a more appropriate metaphor. There have been companies which changed the course of an industry,such as A&P, Ford Motor, Sears Roebuck, even Ron Popeil. These Lemonade folks are playing with fire, though…. and tornados, burglaries… etc. I think that these Lemonade pioneers are going to get burned because this business only starts with selling the product. Geico changed the way insurance is sold but Warren Buffett bought an existing platform and moreover, Buffett is an old school (Wharton) genius,
not some pie in the sky dreamer.
As well, buying coverage on the cheap is the one and only “delightful” customer experience I believe most of their clients will have. All forms of insurance are contracts where the Big Print Giveth and the Little Print Taketh Away. Let’s see how the bots explain that and give wise counsel to their price-first clientele–NOT!
“Lemonade” will sour fast. People are going to sign up for the “cheap” insurance that is being offered, with no idea what they actually have. One claim, and the powers that be will be inundated with unhappy people that will blame the company for swindling them into insurance that gives them no coverage at all. Between claims and then lawsuits, their capital will be gone quickly. I don’t think there will be even a chance for a charity to have any kind of donation.
Nothing about what they are offering innovative, only their messaging, which simply spins how all insurance companies make money into somehow being different for them. Worse, they include the common slander on the industry that the only way insurance companies make money is in denying claims which they must know to be false.
This reminded me of a new homeowners startup carrier in Florida a few years back where the owner’s initial marketing and advertising was pretty much the same “we’ll cut off the agent, go directly to you and save you money”. Well, it didn’t take very long for the owner of this carrier to realize “… maybe not offering our products through the independent agency channel isn’t such a good idea after all…”. Will be interesting to see two years from who wins, Lemonades’s robots or capable independent agents.
So if I understand this correct, they have collected $14,000 in premium, take a “fee” which is also known as commission, and promise to donate any “excess” to a charity based on the groups decision. Wouldn’t one $20,000 loss today wipe out any “excess”. We have non-profit insurance companies already, they are called Mutuals and they return the “excess” to the policy holder via dividends, safe driver, or rate relief. Marketing a promise to donate excess does not sound very actuarially sound, but I’m not a bot.
I think you’ve pretty much covered everything; they have a cute name & the business model sounds gimmicky. I’m especially not in favor of unknown persons donating the “excess” to a charity chosen by supposedly a consensus of customers, so then the business takes the write off for the charitable contribution. The customer would be better off to make their own donation to the charity of their choice and take their own write off.
I’ve looked and looked for something innovative or even interesting about “Lemonade” other than their name . . . and have failed to find it.
Someone . . . anyone . . . tell me what’s so interesting about this start-up that it continues to get media attention.
Someone give the emperor a robe, please!
They keep only the transaction fee, that’s not widely done. They are cutting out brokers and using bots, which is innovative when combined with the machine learnt use-also unique. Most insurers are loaded with people who can’t even use Excel beyond in a rudimentary way. They are drastically different there, although it’s going to be a while before we know hiw well it works. The best ideas are pointless if they aren’t implemented correctly. They also pay claims almost instantly for many things which eliminates the biggest complaint people have with using insurance. They could face more fraud, but that’s yet to be seen.
The only reason ins companies have a delay is to ensure there isn’t fraud. Can’t imagine their reinsurer is accepting such risk meaning they will absorb the inevitable
This doesn’t make sense. It says GWP of $14,000 and 142 policies which is $100.70 a policy, het the average homeowners is $1,042. They must have written just one homeowner policy.
They want to be innovative in the insurance industry. I wouldn’t call getting people who may not be insurance literate to buy coverage online innovative. Most people don’t understand insurance and what limits to buy. Good luck when the claims start rolling in. They’ll be digging into that $34 million investment in no time.
The article is poorly written. According to the article it links to the average in the first 48 hrs was about $86 for renters, $528 for condos, and $691 for homeowners, the average they list here is actually for the first 2 weeks.
If the people buying insurance are ignorant and limits and coverage don’t you think they would be more likely to have uncovered losses than to start digging into the startup funding?
This company will be out of business within a year, mark my words. They came into the marketplace at a 1/3 of the price of the current renters insurance market and they promise to pay your claim within 5 minutes of filing it via video conferencing.they will most certainly get the bulk of the fraud market headed their way and this will wipe out their reserves very quickly.
Brutus, would you like to eat your words yet?
Yeah we saw this before in California with 20 Century cut out the agent cheap price until the claims come in then they went broke and we got all our business back. I can’t wait to see how the Bots are going to handle claims, (instantly) you have got to be kidding. And shame on the Big time Insurance execs exhorting this concept, and by the way these execs got to be who they are on the back of the Independent agency system.
It will be interesting to see how a total loss house fire will be handled by a bot. Or maybe they will actually hire an adjuster to do that bit.!
Well, in that case the robot will just write you a check for $250,000. Gotta love robots!
Hoo boy! They’re going for the “high dive” diving board, aren’t they. I hope the pool has water in it or that it isn’t filled with sharks, a more appropriate metaphor. There have been companies which changed the course of an industry,such as A&P, Ford Motor, Sears Roebuck, even Ron Popeil. These Lemonade folks are playing with fire, though…. and tornados, burglaries… etc. I think that these Lemonade pioneers are going to get burned because this business only starts with selling the product. Geico changed the way insurance is sold but Warren Buffett bought an existing platform and moreover, Buffett is an old school (Wharton) genius,
not some pie in the sky dreamer.
I always liked Ron Popeil. That little fishing rod was cute. People buying Lemonade will get caught holding the short end of the stick.
Complex claims and fraud will eat Lemonade alive.
As well, buying coverage on the cheap is the one and only “delightful” customer experience I believe most of their clients will have. All forms of insurance are contracts where the Big Print Giveth and the Little Print Taketh Away. Let’s see how the bots explain that and give wise counsel to their price-first clientele–NOT!
“Lemonade” will sour fast. People are going to sign up for the “cheap” insurance that is being offered, with no idea what they actually have. One claim, and the powers that be will be inundated with unhappy people that will blame the company for swindling them into insurance that gives them no coverage at all. Between claims and then lawsuits, their capital will be gone quickly. I don’t think there will be even a chance for a charity to have any kind of donation.
They will get what they ask for, the Go Cheap Clients that Professional Independent Agents prefer go elsewhere in the first place.
Nothing about what they are offering innovative, only their messaging, which simply spins how all insurance companies make money into somehow being different for them. Worse, they include the common slander on the industry that the only way insurance companies make money is in denying claims which they must know to be false.