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Bram Kanstein (@bramk)

Lemonade - Forget everything you know about insurance

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Lemonade Insurance Company is a licensed insurance carrier, offering homeowners and renters insurance powered by artificial intelligence and behavioral economics.

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Shai Wininger
Maker
Morning Hunters... I want to introduce you all to Lemonade, the world’s first full-stack insurance company that is powered by bots, stunning design and a good heart. We ditched agents and paperwork, and built an entire insurance company from the ground up to provide users with an experience that’s fit for the 21st century. We wanted to make insurance instant, smart, honest and delightful. But wait, that’s not all. We’ve discovered a way to hack how insurance works! It turns out that on average, about half of the money we all pay insurance companies actually goes to cover for claims. The rest is taken for their expenses and revenues. Now, this is a big deal. It means that insurance companies earn more when we’re paid less (or slower), and explains why so many people have terrible experiences around claims. By design, insurance companies hate to pay because it hurts their bottom line. Lemonade works differently. We take a flat fee upfront, pay for claims and expenses, and give back everything that's left to causes our users pick. Doing this steers us away from that conflict, and when claims come, we’re happy to pay them fast because it doesn’t affect our revenues. This is why we’ve taken on the challenge of building a full stack insurance company (which is fucking hard btw). Starting fresh was the only real way to break the vicious cycle of people not trusting insurance companies and companies not trusting people. Give us a try! I’d love to hear what you think. Shai Wininger Chief Lemonade Maker (The Lemonade App is available for iOS and Android)
Mark Pekel
@shai_wininger In which countries do you operate? Also, what happens to the accounts if your company shuts down (kudos btw, it's not an easy task and this is a field ripe for innovation :)
Shai Wininger
Maker
@haimpekel we've launched NY and will gradually be rolling out additional states soon. As to your second question - insurance companies have to go through strict regulatory compliance process to make sure they stay solvent. In any case, we're financially rated A-Exceptional and are backed by the biggest reinsurers in the world such as Lloyd's of London, Berkshire Hathaway National Indemnity and XL.
Clement Ho
@shai_wininger This is wonderful. Looking forward to this making it's way to Texas!
Jonathan Hursh
@shai_wininger This is so refreshing to see. And finally, a gamechanger on Product Hunt. This should encourage more developer/founders here to turn their considerable talents into much bigger things than I generally see here.
Joshua Dance
@shai_wininger Why pay out the extra to causes? Why not keep for a black swan event?
Benjamin Kimo Twichell
Maybe I'm missing something obvious, but how is this p2p? Are you considering it p2p because it's not a 'traditional' insurance agency?
gil sadis
Maker
@benkimotwichell I think this can help -
. lmk ;)
Benjamin Kimo Twichell
@gilsadis I love the model (and really wish you had travel's insurance!!) but I see p2p insurance as a literal other person insuring me. Perhaps I'm just being too limited in my view of what p2p is ;)
gil sadis
Maker
@benkimotwichell Thanks for your support. I suggest you'll watch the video above and I you'll see how we vision p2p. The tl;dr; of this video is that Lemonade is behind every policy. We're a fully licensed, A-rated insurance carrier and ready to go.
David Heimann
@gilsadis @benkimotwichell I'd agree that I don't really think this constitutes P2P distribution. I like the idea itself but marketing it as P2P insurance feels a little disingenuous :/
Jared Krause
@gilsadis @benkimotwichell Yeah, in no way does this make sense to call it P2P.
Matt
Why not return the money to your customers?
Daniel Schreiber
Maker
@fightn4food We're in total agreement 'spiritually'. However the law in NY doesn't allow that right now - but we're working on updating the law! At the same time we're hoping that even once the law changes customers will still choose to give the money to a cause. It's nice to have insurance were all parties agree that unclaimed money goes to a good cause. See Professor Ariely's explanation here https://youtu.be/6U08uhV8c6Y
Justin Mares
@daschreiber @fightn4food what happens if your claims are larger than your capital pool - do you charge users more? Claw back money from charities? How does this work? As far as I know most insurance companies have huge pools of capital for this reason, which is why they don't aggressively lower rates all the time.
Alex Barnes
@jwmares @daschreiber that's what reinsurers are for. As @daschreiber mentioned, they are reinsured by A rated carriers (insurers of the insurers). I also agree that this is not p2p in the sense that most people would imagine it to be. I think direct to consumer (no brokers) is more fitting.
Brian Lee
@daschreiber why not make it a co-op instead so that there's a larger pool?
Siddhant Patel
@fightn4food This is how one of the makers justifies it somewhere else in the comments - "In terms of why we're giving it to charity, part of the thesis is that people feel entitled to embellish claims (25% say so to pollsters) and that this creates artificially high claims ratios. Knowing over-claiming is impacting a cause you believe in, rather than an insurance company you don't, creates a self-fulfilling dynamic where people claim more responsibly and therefore charities get more" This makes absolute sense.
Yoav Aziz
Amazing design & on-boarding. Good luck!
gil sadis
Maker
@yoav_aziz Thanks! Glad you liked it :)
Bram Kanstein (@bramk)
Hunter
Big launch of an awesome new #insurtech company today - they're on a mission to change the insurance world - @shai_wininger & co can tell you more!
Yehonatan
Looks very interesting, I've got two questions - A) How are you going to cover your users from fraudulent claims? B) "We take a flat fee upfront, pay for claims and expenses, and give back everything that's left to causes our users pick. " On what money does your company backs itself? How does it guarantees payment for claims? Thanks in advance
Daniel Schreiber
Maker
@yehonatan_tsirolnik Thanks for the interest. On (A) fraud it's a combination of tech and human capabilities, but the interesting thing with insurance fraud is that most of it is driven not by hackers but by people like you and me. See https://youtu.be/6U08uhV8c6Y to understand how we're hoping to change the motivations around this. on (B) Lemonade has received an A-Exceptional rating, is regulated by the State of NY and is reinsured by Lloyd's of London and others!
Avi Zuber
@daschreiber @yehonatan_tsirolnik This looks awesome! I understood question B as the following: If I give you $100, you return $50 to me for a claim/expenses and then give $50 to the charity of my choice, how are you making money? The line "We take a flat fee upfront, pay for claims and expenses, and give back everything that's left to causes our users pick. " makes it sound like there is nothing for you to pocket. Where is your revenue coming from?
Daniel Schreiber
Maker
@avizuber @yehonatan_tsirolnik We take 20% of every dollar we collect. That's it. We never make money by denying claims, because when there's money leftover, we donate it to a cause of your choosing. And if there's not enough money? That's not likely, but just in case we are reinsured by Lloyd's of London and Berkshire Hathaway. Makes sense?
Avi Zuber
@daschreiber @yehonatan_tsirolnik Yup, and as a consumer I'm comfortable with you taking 20% (well, a consumer once you make your way to Israel). I think the marketing messaging just wasn't so clear. Like on your home page you show the 20% of the pie, but then it seems to indicate that that 20% is what is going to charity. Either way, I appreciate the response, you have my upvote, good luck!
Andrew Weibert
@daschreiber @avizuber @yehonatan_tsirolnik Do you have to pay Apple a % when subscriptions come via the app? Or is there some way around that? Thanks!
Jack Smith
another unquantifiable (worse, provably false) tagline: "The World's First P2P Insurance Company" um, except companies that were doing this since 2010: https://en.m.wikipedia.org/wiki/... why do companies feel the need to embellish things by saying they're the "world's first", "only company doing x" or "best x"?
Daniel Schreiber
Maker
@_jacksmith Jack, it's a fair point. In some ways P2P insurance has been around for thousands of years! However, in the sense in which it is being used today (fintech, technology based) I think we are the first insurance COMPANY. Others are brokers, using traditional insurers as the underlying insurance company. Lemonade is different, we're actually a licensed insurance carrier. That is a first and I guess we're pretty proud of it! Owning the whole stack allows us to offer an experience that is very different (much harder to do if you're just a broker). Don't mean to bluster, but do want to draw people's attention to the differences.
Jack Smith
@daschreiber "thinking" you're the first isn't a justifiable reason to lead with that as your tagline imho. It's a shame, as I think what you're working on looks fantastic, I'd definitely use it when it's in SF. I just feel that having something like that as your tagline makes the company seem less credible.
Stuart McCroden
@daschreiber @_jacksmith How much do you reinsurer, roughly?
Itamar Kestenbaum
Great concept - and very strong team - can't wait to check out the product. Great job, @shai_wininger and team!
Eytan
Looks rad. Love it when ppl think big. Good luck!
gil sadis
Maker
@normal_ppl Thanks! We're really excited.
Raphael Ouzan
What a huge step for the insurance industry. Groundbreaking thinking and brilliant execution down to the last pixel.
gil sadis
Maker
@raphaelouzan thanks for your support!
Dan Ariely
Maker
yael wissner-levy
Maker
@raphaelouzan yo! thank you!
Shai Wininger
Maker
@raphaelouzan Thanks man!
Raphael Ouzan
@yaelwiss you rocked that video Yael!
Jeremy Zykorie
I'm the most curious about the math of this. You take 20% of every premium collected. That itself is a model that'd be interesting to see the details of - eg, how that 20% is spread out to cover your expenses, and what profit is left. But that aside, what % do you anticipate to go to claims, and what % to anticipate to be left over? I assume in theory you'd like to target 0% going to charities - not because anyone is anti-charity, but because if there's money left over, then premiums were too high. Is that correct? As a way of "getting around" the law that you can't give excess back to customers, why not just keep the excess as cash on hand and purposefully lower premiums the next year recognizing you have excess cash to cover losses?
Daniel Schreiber
Maker
@jeremyz123 It's a tough question to answer with certainty, but we have modeled these things as best we can. The models predict about 15% (give or take) going to charity, though it will vary from group to group and year to year. In terms of why we're giving it to charity, part of the thesis is that people feel entitled to embellish claims (25% say so to pollsters) and that this creates artificially high claims ratios. Knowing over-claiming is impacting a cause you believe in, rather than an insurance company you don't, creates a self-fulfilling dynamic where people claim more responsibly and therefore charities get more.... See Dan Ariely's comments here https://youtu.be/6U08uhV8c6Y
Benjamin Malartic-Ardange
Great job here! I went through your on-boarding / insurance sign-up by clicking on "Check our prices". The experience is astounding ! The UI is smooth, the questions and possible answers are crystal clear, I didn't even feel frustrated by the many steps. I had an Aha! moment during the rating of the address I entered (when you check building, environment, satefy data), great value there.
gil sadis
Maker
@benj_malartic that's awesome feedback! Really glad you liked it and thanks for your support
Andrew Weibert
Incredible on so many levels! Very inspiring work! Just curious, I see you take payments on iOS. How did you get around the Apple Tax (or are you just paying it)? Thanks!
gil sadis
Maker
@andrewweibert thanks for your support! We're not using in-app purchases. It's our own gateway.
Yam Regev
Good cause as a business model IS refreshing! Seems that Lemonade's solution and pricing model will definitely change the world of insurance. For ever!
Shai Wininger
Maker
@yamre thanks dude
gil sadis
Maker
@yamre Thanks!
Comic-CONnor
U.I is incredible, website looks amazing, and product is awesome. I know the point of Lemonade is that by having less business costs you're able to provide such an affordable and quality product, but if you need a web developer I would kill to get my hands on this beauty. 😍
yael wissner-levy
Maker
@connorgutman Thank you for that love! It is quite a stunner, isn't it? :) We're not hiring just yet but stay tuned.
Yaron Samid
Good luck Shai and team. The execution on setup and overall UX is flawless! And to think, for an insurance company. New day.
Shai Wininger
Maker
@yaronsamid Thanks man!
Scott Entwistle
@shai_wininger any plans to get into auto/health insurance?
Shai Wininger
Maker
@scawtent we're going to expand to new markets and territories, but currently focusing on homes
Steven Rueter
So cool to Prof Dan Ariely on their team. Love the information video. Very very cool.
Uri Eliabayev
I have been waiting for this for a long time! keep the hard work :)
gil sadis
Maker
@urieli17 Thanks for your support!
Dan Peguine
Very very promising. Congrats!!