The company is headquartered in New York City, and is currently focused on selling renters’ and homeowners’ insurance products there. Also pivotal to the Lemonade model is the idea that unspent premiums will be funneled back into the community through philanthropic initiatives.
“Technology drives everything at Lemonade” Shai Wininger, the company’s president and co-founder, said in a press release about the launch. “From signing up to submitting a claim, the entire experience is mobile, simple and remarkably fast. What used to take weeks or months now happens in minutes or seconds.”
What remains to be seen is whether a business such as Lemonade can manage the same level of personalized financial and estate planning advice as professional agents and advisors.
Lemonade says its mobile technology can provide consumers with policies at a fraction of the cost of what competitors offer. Homeowners’ policies start at $35 a month, and renters’ insurance starts at $5 a month. Though the company has not announced plans to move into the life and health insurance space, it would seem a natural extension of their current product offering — or could perhaps become the focus of a competitor.
LifeHealthPro spoke to Lemonade CEO Daniel Schreiber (seen here at right) by telephone Wednesday to find out more about the effect his team hopes to have on the insurance business.
What follows are excerpts from a 15-minute telephone conversation:
In this video, Lemonade co-founders Daniel Schreiber and Shai Wininger, together with Lemonade’s Chief Behavioral Officer Dan Ariely, explain the science behind Lemonade. (YouTube)
LifeHealthPro: What was involved in getting Lemonade to this launch milestone?
Schreiber: We founded the company just over a year ago, in June of last year. We’ve had to build everything from scratch. Fortunately we have a very unusual and eclectic team in place, from technology and behavioral science and insurance; not the kind of people you often see under the same roof. Even my partner, Shai Wininger, is a pioneer in the product development space. So that was one piece of it. Next, everything we developed on the technology side has been from scratch. That’s a pretty significant departure from what is commonplace in insurance today. [We designed software for] everything that’s happening behind the scenes, including generating policies and underwriting claims. And the there’s third leg of the business, which has been the regulatory side. New York State regulators are very exacting. So getting to the point where we could get licenses was a big step as well.
LHP: You’re launching with renters’ and homeowners’ insurance policies. Are there plans to expand your line of insurance products?
Schreiber: I wouldn’t say that we have plans as much as we have aspirations. Right now, we want to make a success of what we’ve launched. All of our efforts right now are on homeowners and renters in New York. Our aspirations are expansion, but I can’t speak to that right now.
LHP: Why launch Lemonade in New York?
Schreiber: There were a couple of reasons. First, it’s the financial center of the nation, and it’s where financial revolutions can take place. Also, it has a technology- and forward-thinking population. These are people who are receptive to our message. On the regulatory side, New York is conceived as the toughest of the 50 states. We figured if we can satisfy regulators in New York, we can satisfy them in the other states as well.