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Lemonade takes steps toward a New York product launch in coming weeks

Brian Anderson

For a high-profile startup, Lemonade has been a bit quiet lately as it prepares for launch, but the self-proclaimed “world’s first peer-to-peer insurance carrier” has been busy behind the scenes.

Back in late February, New York City-based Lemonade announced that Dan Ariely, a noted bestselling author and professor of psychology and behavioral economics at Duke University, had joined the company as its “Chief Behavioral Officer.”

And then this week, Lemonade CEO & Co-Founder Daniel Schreiber announced that, by unanimous vote of the fledgling company’s board and shareholders, Lemonade is now a Public Benefit Corporation and was also awarded provisional “B-Corp” certification – both firsts for an insurance company, Schreiber said.

“Rebuilding insurance as a social good, rather than a necessary evil, is now part of our legal mission,” Schreiber said in a post announcing the news. “Our Chief Behavioral Officer, Professor Dan Ariely, says that ‘If you tried to create a system to bring out the worst in humans, it would look a lot like the insurance of today.’ Working in partnership with nonprofits, and baking giving back into our business model holds the promise of a better insurance experience and a more valuable insurance company.”

Schreiber also said they are busy putting “finishing touches on our product” and will be ready to launch in New York within weeks. “The final step is for us to get our license, and if all goes to plan, we’ll have that shortly,” Schreiber said.

Specific details about how the company plans to reinvent homeowners insurance with its “P2P” model have yet to be released, but in speaking about his decision to join the executive team at Lemonade, Ariely said the insurance market has been “crying out” for a makeover.

“With its unique business model and technology, Lemonade aims to reverse the adversarial dynamics that plague the industry, transforming both the economics and experience of insurance,” Ariely said.

Shai Wininger, Lemonade’s other Co-Founder and President, said Ariely’s extensive research on dishonesty showcases the leaps science has made in understanding what brings out the best and worst in each of us, and how people’s behavior can be changed for the better.

“We believe that behavioral economics, together with our unique technology, will help us decrease fraud, get rid of bureaucracy and lower costs for our customers,” Wininger said.

Back in early February, Lemonade announced a lineup of top-tier global reinsurance partners, including Berkshire Hathaway’s National Indemnity, Everest, Hiscox, Munich, Transatlantic and XL Catlin. They include two of the leading syndicates at Lloyd’s of London.

“We’re proud to support Lemonade’s creation of a fast, simple, and consumer driven insurance platform,” said Mike McGavick, CEO of XL Catlin, in a release announcing the reinsurance partners. “Consumer trust in the insurance system is at the heart of the insurance business, and is essential to the success of any new venture. With this collection of leading reinsurers, Lemonade’s customers will know this innovative venture is backed by some of the best and most established in the industry.”

Lemonade set records with its initial funding by Sequoia and Aleph, followed by its announcement that a cadre of senior insurance executives had jumped ship to Lemonade. With Berkshire Hathaway’s National Indemnity and Lloyd’s of London backing Lemonade and this week’s announcement, the stage is set for Lemonade’s consumer launch in the coming weeks.

“For insurance to provide true peace of mind, you want to know your insurer is both willing and able to pay your claims,” Schreiber said. “Lemonade is the only insurer that doesn’t make money by denying claims – so no one is more willing than us. With the backing of the world’s foremost reinsurance names, no one is more able, either.”

Lemonade’s stated vision is “to harnesses the power of behavioral economics and the sharing economy, delivering to consumers an insurance experience that is instantaneous, unconflicted, and downright delightful.”

Stay tuned (by providing your email address for “early access” to breaking developments) at www.lemonade.com.

• What are Insurance Forums members saying about Lemonade? Please visit this thread on Insurance Forums: Will ‘Lemonade’ be the Uber of Homeowners Insurance?

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