UPFRONT
HEAD TO HEAD
Is the P2P business model adaptable to insurance? The new startup Lemonade certainly thinks peer-to-peer insurance is viable – but will it gain any traction in the industry?
Mark Breading
Daniel Schreiber Co-founder and CEO Lemonade
Executive director, Agents Council for Technology Independent Insurance Agents & Brokers of America
“The peer-to-peer insurance movement is bringing insurance back to its roots. In the early days, a group of local farmers or a building society would band together to pool their risks. Over time, the business got more complex and more regulated, so more insurance carriers emerged to underwrite the risk and administer the policies. Now in the digital age, everyone is connected and can exchange information instantly. Technologies like cloud computing, analytics, social media and blockchain make it easier to implement peer-to-peer schemes – extending to point-in-time risks through microinsurance.”
“At Lemonade, we’ve incorporated a model that is harmonious with the sharing economy. We like to say that Lemonade is the oldest new idea in insurance. We’re using technology to bring people together and allow them to insure in a way that is reminiscent of how it was done a couple hundred years ago. Our model gathers like-minded individuals, or peers, around a certain charity. We use the premiums of each peer group to pay their claims, and give back the leftover money to their common cause. Innovative business models and tech are bringing insurance back to its roots.”
“Peer-to-peer has been a part of insurance for some time now. In its current business model, P2P provides excellent case studies for our independent agent distribution to learn from. Upstarts such as Lemonade and others are focusing completely on the customer experience, from being able to go start-to-finish via mobile, to using machine learning to guide conversations, and using text chat, video, online payment, e-signature, guided claims processing, and payment. They are providing clear examples of how the customer is demanding to be served, and how we as a distribution channel must respond.”
Partner Strategy Meets Action
Ron Berg
THE UBER OF INSURANCE Lemonade, the game-changing startup striving to bring the peer-to-peer model to insurance, represents the newest disruption to an industry already grappling with changes enabled by tech. In addition to its peer-to-peer model, the recently launched New York-based insurer, which focuses on coverage for renters and homeowners with policies starting at $5 and $35 a month, boasts a payout system that allows policyholders donate any money remaining from their insurance policy at the end of the year to a chosen nonprofit. The company, which sells policies via an app, has already raised $13 million from such big names as XL Innovate and Sequoia and has also secured reinsurance deals at Lloyd’s and with Berkshire Hathaway.
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28/10/2016 4:18:46 AM