Will ‘Lemonade’ Be the Uber of Homeowners Insurance?

[GXR2]

This will most likely appeal to the younger generation (<30) who are more trusting of internet based business and who have higher rates. The other 90% of the population will seek familiar, strong brands with part of that seeking client/agent relationship.

One out of every three clients who buy from me do so because they're concerned about what will occur on claim day - claims experience, compensation, etc., and they trust the brands I'm appointed with.

There is still a huge wealthy population out there who will seek advisors for every area of their life, including their money, insurance, etc.

 

[Cash]

I don't know but I feel all tickled and warm after reading the vision of this startup

 

[MichaelBurton]

Lemonade is probably just beginning to find out how sour the industry can be when confronted by a Chief Behavioral Officer with pretty incendiary language . . . BEFORE it is approved to do business.

My gut says they are already getting stonewalled and this is an attempt to begin pressure regulators through public sentiment.

If not, the most recent press release (where the CBO is quoted, not the one above) is a pretty reckless and inflammatory move, IMHO.

Just because something is true, doesn't mean you should say it.

 

[Brian Anderson]

Lemonade, the "world's first peer-to-peer insurance company," today (Sept. 21, 2016) announced it has been licensed as a full-stack insurance carrier by the state of New York.

Lemonade says New York homeowners and renters can now get insured and settle claims instantly, anytime and from any device.

From a press release announcing the launch:

Lemonade's homeowners policies start at $35 per month, and renter's at $5 per month. The nation's largest insurers charge entry-level-renters between 2x to 4.5x more for equivalent coverage

"… we architected Lemonade to avoid conflicts of interest. We take a flat 20% fee, and give unclaimed money to a cause of the policyholder's choice. Since we don't pocket unclaimed money, we can be trusted to pay claims fast and hassle-free.

Read more here:

Insurance Forums | Lemonade launches its unique homeowners and renters insurance model in New York

 

[DJAJ]

"It's what you get when you replace brokers and paperwork with bots and machine learning." Well isn't that great. What is the fascination with these companies and trying to get rid of humans and why are people okay with that? Why would humans support a company that wants to take away jobs from humans and give it to robots?

 

[shawnmwalker]

There seems to be some inherent problems with the model. Here are a few…..it will be interesting to see how they address them.

#1: It is a big jump to think that insured's will be honest with a carrier just because the carrier will now give the excess to your charitable choice. There will always be that person who says, "Hey man, I lost my ex-wife's ring!" "Hey man, My car got stolen, no it is not at the bottom of the river and it has nothing to do with me living a financially unresponsible life"

#2: How will reserves work? Won't a policy holder say, "Whoa, why investment income? Why 5b in reserves? Why revenue on my Premiums prior to Charitable payouts? Why Huge % of Reserves you have sitting there? Pony some of that up- make good on your promise and give that to my Charity" "Are you making money off my 20% or my Investment income"

The idea is cool, but the average insured does not understand IBNR, ULAE, ALAE, and all the other great acronyms we have in our industry.



I see this needing a # of Tweaks before the vision is truly achieved, but it is a great first step for them…..Not us.

 

[insurance1822]

I understand how the concept makes sense.

But...they don't understand how stupid the general public is. Not gonna work IMO. They won't have enough people buying in & their REins will bail.

Maybe in 20 years.

 

[dean8287]

We are located in PA and insure a lot of Amish and Mennonite contractors and business's of varying types. When we insure them we never insure the property because it is insured under the church very similar to this model. Liability on the other hand is something the Church won't touch which is why this lemonade will not work. The property will not work for them either. It only works for religious groups like this because of their faith and loyalty to their church and each other. This will not exist in the Lemonade model and although it is an interesting concept it will be a disaster in the end. This model really only works when members feel accountable to each other.

 

[insurance1822]

........Lebanon Levi?

 

[WillC]

There is a dangerous tone in this thread that feels like smug assurance that Lemonade brings nothing new -- or that they are doomed to fail.

We should take the disrupters very seriously. The taxi industry virtually slept through the Uber rise -- only screaming after their Ox was gored.

For this post -- no opinion, just encouragement to avoid a naysayer mentality that may turn out to have been wishful thinking.