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This Peer-To-Peer Insurance Company Is Powered By Bots

This Peer-To-Peer Insurance Company Is Powered By Bots
Financial Services

Lemonade is a new product designed to lighten the paperwork and provide instant, helpful service when needed

Jennifer Passas
  • 28 september 2016

Insurance companies are not typically known for having great customer service. The fees are complicated and if something goes wrong, often customers feel like they have to jump through hoops for the service and protection paid for. A new insurance provider called Lemonade is the first full-stack insurance company that is peer-to-peer and powered by bots. Saying goodbye to agents and paperwork, Lemonade provides instant, smart and fast service.

Peer-to-peer insurance reverses the traditional insurance model, treating the premiums paid as the customer’s money, not that of the insurer. Lemonade takes a fixed fee out for monthly payments, buys reinsurance and then uses the rest for paying claims. By conducting business this way there is often money left over at the end of the year after paying claims. Instead of taking the money, Lemonade will paid it forward to charity.

The Lemonade app delivers a simple check-based experience that is powered by bots not brokers, allowing people to be insured in seconds and paid just as quickly. The founders, Daniel Schreiber, Shai Winniger and Professor Dan Ariely have flipped what they believe is an inherent conflict of interest in the structure of the insurance industry today. Currently, every dollar an insurer pays is a dollar less profit for them, so when something bad happens to its customers, their interests are in direct conflict.  The current model encourages customers to embellish their claims, which increases distrust and make the whole process painful and frustrating.

The company is incorporated as a public benefit corporation, not just for marketing reasons but because Lemonade’s business model is structured on gathering people with a shared cause together and re-aligning incentives to bring out the best in everyone. Additionally, Lemonade is reinsured by some of the biggest reinsures in the industry including Lloyd’s of London, Berkshire Hathaway’s National Idemnity, XL Catlin and others.

Lemonade can be accessed both by mobile (iOS and Android) and on web versions. It is currently available for renters, condo and homeowner insurance in New York State with a plan to expand to other states soon.

Lemonade

Featured image: Couple celebrating a new home via Shutterstock 

+AI
+automation
+bots
+financial services
+insurance
+lemonade
+peer-to-peer payments
+startup
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