Lemonade Insurance Company

Lemonade Insurance Company is an American property and casualty insurance company headquartered in New York City offering renters and home insurance policies for homes, apartments, co-ops and condos[1] in many US States in addition to content and liability policies in Germany and the Netherlands.[2][3]

Lemonade Insurance Company
Private
IndustryInsurance
FoundedApril 2015 (April 2015)
New York City, United States
FoundersDaniel Schreiber (CEO) & Shai Wininger (President & COO)
Headquarters5 Crosby Street,
New York City
,
United States
Area served
Arkansas, Arizona, California, Connecticut, Washington, D.C., Georgia, Iowa, Illinois, Indiana, Maryland, Michigan, New Jersey, New Mexico, Nevada, New York, Ohio, Oregon, Pennsylvania, Rhode Island, Texas, and Wisconsin
ProductsHome & Renters Insurance
Websitewww.lemonade.com

Lemonade delivers insurance policies and handles claims through desktop and mobile apps using chatbots. Its business model includes giving underwriting profits to nonprofits of the customers’ choice. This is done annually in an event Lemonade calls “Giveback”.[4]

Lemonade Inc. is backed by investors including Aleph, General Catalyst, GV (formerly Google Ventures), Sequoia Capital, Thrive Capital, XL, and Japanese tech investor SoftBank, having raised $120 million as of December 2017.[5]

On June 8, 2020, Lemonade filed an S-1 form for registration of securities in preparation for an Initial public offering[6]

History

Lemonade was founded Daniel Schreiber (former president of Powermat) and Shai Wininger (co-founder of Fiverr), in April 2015.[7] Dan Ariely joined in 2017 as the Chief Behavioral Officer at Lemonade.[8]

Funding

In December 2015, Lemonade Inc. announced that it secured $13 million in seed funding from Sequoia Capital and Aleph.[7] In August 2016, Lemonade Inc. raised $13 million in funding from XL Innovate (part of XL Group), followed by a $34 million Series B funding round in December of the same year.[9] The Series B round was led by General Catalyst with participation from Thrive Capital, Tusk Ventures, and GV (formerly Google Ventures), the VC arm of Google's parent company Alphabet Inc.[10]

In April 2017, the company announced additional investors: Allianz SE and Ashton Kutcher’s Sound Ventures. In December 2017, Softbank invested an additional $120 million in Lemonade in a Series C round, increasing the total money raised by the company to around $180 million.[11] In April 2019, Lemonade announced a further $300 million investment in a Series D financing led by the SoftBank Group, with participation from Allianz, General Catalyst, GV, OurCrowd, and Thrive Capital, increasing the total money raised by the company to $480 million.[12]

Financials

Lemonade underwrites its own policies and is reinsured at Lloyd’s of London.[13] In 2020, Ohio-based financial analysis firm Demotech rated Lemonade’s financial stability as A-Exceptional.[14]

Business model

Lemonade’s business model differs from that of typical insurance companies in that it keeps a flat 25% fee of a customer’s premium while setting aside the remaining 75% to pay claims and purchase reinsurance.[15] Unclaimed premiums go to a nonprofit of the user’s choosing in an annual “Giveback.”[16]

Technology

Lemonade uses chatbots to provide insurance policies and handle claims.[17] In 2016, a customer filed a claim for a stolen coat; after answering a few questions on the app and recording a report on their iPhone, Lemonade's claims bot set a world record by reviewing, approving and paying the claim in three seconds.[18]

Social good

Lemonade Inc. which is registered as a public benefit corporation, has a stated mission of ‘transforming insurance from a necessary evil into a social good."[19] Upon signing up for Lemonade, users select a nonprofit or charity that will receive payouts on an annual basis from the unclaimed premiums (also known as underwriting profit) of their respective cohort.[20]

In May 2016, Lemonade became one of the only insurance companies to receive B-Corporation certification.[21]

See also

References
  1. "Lemonade Insurance Review 2017 - NerdWallet". NerdWallet. 2017-08-02. Retrieved 2017-08-09.
  2. "Lemonade Launches in the Netherlands". www.businesswire.com. 2020-04-02. Retrieved 2020-05-03.
  3. "Bloomberg - Are you a robot?". www.bloomberg.com. Retrieved 2020-05-03.
  4. "The Lemonade Giveback & Social Good | Lemonade". www.lemonade.com. Retrieved 2018-05-31.
  5. "Plasmonics startup receives $1 million from venture capital firm". Physics Today. 2013. doi:10.1063/pt.5.027153. ISSN 1945-0699.
  6. https://sec.report/Document/0001047469-20-003416/
  7. Shieber, Jonathan. "Sequoia Invests $13 Million In A Seed Round For Lemonade, Which Is Looking To Transform Insurance | TechCrunch". Retrieved 2017-08-09.
  8. "A top psychologist says insurance sucks, so he's joining a startup to fix it". Business Insider. Retrieved 2017-08-09.
  9. Lemonade. "Lemonade Announces Additional Funding by XL Innovate". www.prnewswire.com. Retrieved 2017-08-09.
  10. "Google participates in Lemonade's $34M round". Business Insider. Retrieved 2017-08-09.
  11. "Lemonade Raises A $120M Series C, Softbank's Fourth Investment Into A Property Startup". www.crunchbase.com. Retrieved 2018-05-20.
  12. Azevedo, Mary Ann (2019-04-11). "Insurance Startup Lemonade Gets Sweeter With $300M Infusion". Crunchbase News. Retrieved 2020-05-03.
  13. "Leading Reinsurers Line Up for Lemonade, the P2P Insurer". Insurance Journal. 2016-02-09. Retrieved 2017-08-09.
  14. "Financial Stability Ratings®: Demotech". www.demotech.com. Retrieved 2017-08-09.
  15. Moodie, Alison (2017-01-28). "How artificial intelligence could help make the insurance industry trustworthy". The Guardian. ISSN 0261-3077. Retrieved 2017-08-09.
  16. "How is Lemonade Different Than Mutual Insurance?". My Money Blog. 2017-04-10. Retrieved 2017-08-09.
  17. "Lemonade are Live. Insurance will never be the same again!". www.the-digital-insurer.com. Retrieved 2017-08-09.
  18. "A New York startup shakes up the insurance business". The Economist. Retrieved 2017-08-09.
  19. Moodie, Alison (2017-01-28). "How artificial intelligence could help make the insurance industry trustworthy". The Guardian. ISSN 0261-3077. Retrieved 2020-05-03.
  20. Shieber, Jonathan. "Less exciting than Beyonce's album, but maybe more rewarding, Lemonade launches new insurance plans | TechCrunch". Retrieved 2017-08-09.
  21. Lynn, Jordan. "Major disruptor Lemonade in double industry first". Insurance Business. Retrieved 2017-08-09.
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