This is wildly un-new. Mutual insurance companies have existed for literally hundreds of years. Oldest one I can find in 5 minutes dates to 1762, and if you include merchant insurance organizations, probably <1400 (although those probably end up looking more like equity arrangements).
Probably 20% (edit, now that I think of it, maybe up to 50%) of "hot new startups" I see posted to the front page of HN on a weekly basis are an existing business model with a slick web 2.0 front end, CSS/HTML5, etc, a marketing department run by generation Y and some mobile app developers.
Yup. Amazon is 'just' a department store with home delivery - been around since Victorian times. Google - directory enquiries. First launched in the 1930s. /s
Just because a business is using a proven model, doesn't mean it can't be a "hot new startup". Good for those businesses with sound fundamentals made accessible through new technology.
Yeah - aren't a good 20% of Silicon Valley startups just Unix commands reinvented (badly) as websites?
I'll by a beer for the first person to get to Unicorn status with an actual shell buitin (as opposed to all the SaaS companies that are just repackaged standard Linux/Unix distribution packages).
(Rushes off to register echo.io, pwd.io and logout.io...)
I'm off to found Ellis (ls), the company that displays current directory information, file creation information, and file ownership in an easy to use dashboard, but with websockets, Golang and React. Quick somebody give me a super new log structured merge tree db to use to store Ellis data.
Hacker News is a forum with very few additional features found on more popular sites like Reddit, and is significantly more narrow in topic scope and userbase.
That's...better. But it also depends on where you prefer to talk tech.
It's not even a deliberate misrepresentation - in most cases the people involved really, genuinely believe that they have come up with something that no-one else thought of.
The question is why investors, who are supposed to be well informed, continue to back companies that know so little about the industries and markets they're operating in.
And the funny thing is, we do X but with lower costs/higher margins than existing companies A, B and C because Y is actually a compelling pitch...
True. We like to say that Lemonade is the oldest new idea! I think that's what the sharing economy is all about, using technology to revive modes of social interaction that used to be commonplace.
Thats a great way of looking at the sharing economy. Once upon a time I asked my neighbor for a cup of sugar and they obliged, if even begrudgingly. Nowadays I pay a task rabbit $35 to get me a cup of sugar.
Is that a bad thing? It just means that it's an existing market, done better. Your comment reminds me a lot of the first criticism of the iPod "less space than a jukebox" or the guy who berated Dropbox by calling it a dumb GUI to rsync.
Can an insurance company really claim, as Lemonade does, that:
the Service Is Available “As Is.” YOU EXPRESSLY UNDERSTAND AND AGREE THAT: (a) YOUR USE OF THE SERVICE AND THE PURCHASE AND USE OF ANY PRODUCTS OR SERVICES ARE ALL AT YOUR SOLE RISK. THE SERVICE IS PROVIDED AND PRODUCTS ARE SOLD ON AN “AS IS” AND “AS AVAILABLE” BASIS. TO THE MAXIMUM EXTENT PERMITTED BY LAW, LEMONADE EXPRESSLY DISCLAIMS ALL WARRANTIES AND CONDITIONS OF ANY KIND, WHETHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO THE IMPLIED WARRANTIES AND CONDITIONS OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT.
In other words, they are promising nothing. How then can you rely on them for insurance?
That might be a cut and paste TOS, with a little CTRL-H for flavor. Otherwise, that TOS hopefully is intended to apply to the website only.
If anyone has gotten far enough with them, I'd love to see their actual insurance contract. I'm too lazy to go pull their state filings.
EDIT: Here's the part that troubles me more -
"GIVEBACK
... our stated intention is to calculate the amount of leftover money by subtracting from the group’s collective premium, our flat fee (currently 20%), the costs of claims, a “rainy day fund” and other insurance expenses like reinsurance – and giving back what’s left (up to 40% of the group’s premiums). ... "
That 20% "flat fee" is about 8% less than the industry standard expense ratio. That's pretty aggressive expense reduction, to the point where I'd wonder if they'll run out of money, or if they plan to write only the most preferred of preferred risk. I know it reads as though a "rainy day fund" and reinsurance are separate items, but a rainy day fund only happens if you run a surplus, and I'd be shocked if anyone is reinsuring this block at reasonable rates unless, again, (very) preferred risk - at which point you wouldn't want or need to reinsure.
I know it sounds odd, but as a startup, I'd be happier as both a potential customer and potential employee (both very hypothetical) if they called it 30% and undershot it. You don't want to run out of money. It's not an industry where you can just fire some employees unless you're really overstaffed, since service level declines drive complaints, and enough complaints and suits put you out of business.
EDIT 2: All of that said, I'm rooting for these guys. This industry needs modernization pretty bad. If they can make their 8% back from process and tech optimization, that's great. I'm not trying to be negative, I really want them to succeed.
SmellTheGlove you're right. What joosters pasted is our website's TOS...
You can definitely build a profitable insurance business with a 20% expense ratio. Our expenses are much lower than traditional insurers, plus we're not planning on buying any private jets :). We're here for turning insurance into a social good, as it was 400 years ago.
Thanks for your support!
You can, but there are very few P&C insurers currently doing it, and I've not seen an insurance startup willing to operate the way they do it. In the short run, you're only writing NY insurance, and 20% is completely possible. Scale is going to hurt initially, but if you do it right, it is possible to bring expenses back down. Legal and compliance, as well as handling claims, is going to be expensive on the way to 50 states.
My unsolicited advice, which may be worth exactly the zero that it's costing you, is to establish lean management and process control up front, and take a very hard look at the expenses you add in growth mode and evaluate whether you still need all of that once you've established 50 state operations and presumably can leverage internal economies of scale. That's one hell of a run on sentence.
And fix your website TOS to make it unambiguous that it does not apply to the insurance product or contract. You never know when some regulator is going to take issue.
Sure, it's from the website, but the language makes it clear that it covers everything - the "...SERVICE AND THE PURCHASE AND USE OF ANY PRODUCTS OR SERVICES" part. If you care for clarity, put an actual terms of service up that matches with your company behaviour.
I was talking about expense ratio, not loss ratio. Thought that was pretty clear in my post, but too late for me to edit.
Also if expected losses really are 50%, are we really talking about a projected 70% combined ratio? Forgive my skepticism, but that's really hard to pull off, and there's going to be regulatory pressure to take rate if that happens with any consistency.
I got to "enter your name" and leaked out of the funnel. I'm willing to give up my zip code to find out how you compare to my current provider. Give me some good rates to entice me out of the rest of my data.
That's pretty harsh. If misinterpreting a comment on a forum is reason to dismiss a whole team then I don't think any of us would be qualified for anything.
Not this time- just a good ol' case of launch frenzy. Saw the comment, just this part "I got to "enter your name" and leaked out of the funnel" and jumped to conclusions :).
They could've stated that they want to see the offers without providing a lot of information off hand.
You might want to consider displaying similar quotes for the area and filter them based on age group and income.
I don't know if there is a regulation requiring you to take the name before displaying a quote or not since different countries can have a different legal statue for a quote.
@gilsadis, in response to your request for information above:
As others related, this isn't a bug report. This is about the design of your conversion funnel and the appropriateness of what levels of information I will consent to offering while your site is attempting to build a relationship with me.
When you don't know me, you can have my zip code. Show me some awesome rates based on my zip code, and maybe then I'll give you my name or email address. I don't want to leave mouse droppings of personal information all over the internet unless I am intent on engaging with your company. Got it?
And here's the truth. I am in the process of examining and amending my insurance coverage because we are deleting a car. So you lost a qualified hot lead. So hand that data to your hippo.
- If it's so secret, why is it not called "password"? Why is it printed on your id card for anyone to see? Why do many organizations require it?
- If it's used in so many places, how is it expected to prove anything about your identity? It's identification (i.e. which row in the government's citizens database), not authentication.
Every employer wants my SSN. Every time I interact with the government, they want my SSN. It's in way too many places to be secret (like a PIN is), and besides, the government never told me it's secret. The government's info page about it and Wikipedia don't say anything about not giving it to anyone who asks for it.
Risk models will depend heavily on your specific address, especially in NYC where two properties on the same block might have vastly different risk profiles. Your name is likely used for credit score (effectively conscientiousness score) which is also a huge correlate of risk.
In theory, this is indeed true. However I went through the funnel twice. I googled "The worst neighborhood in new york", went to google maps and picked a random address from this neighborhood. Got the exact same price as another "good" neighborhood in new york.
It's possible the quote is not the actual price - for home insurance, at least, you typically pay the quote & you're covered until they can do an in-person inspection & give a "real" price. You can then either pay / get back the difference, or cancel with a refund for the remainder of the term.
I will answer you as nobody else will. Hacker News users are interested in this idea, but don't want to divulge their actual address to get a "price quote". Ideally, they'd like to give their zip code and get a round-about dollar figure they can use to compare to their current pricing.
Fair enough. The reason we ask for your name first is because we want to create a more personal chat experience. We believe that buying insurance should not only be instant but also delightful.
The comment above yours clearly states HN users don't want to divulge exact address. In fact, they specified their ideal (zip code->quote) but you start justifying why you ask for name when nobody pointed as that being the issue.
To be fair, every other major renters insurance company requires a lot of personal information up-front before giving you a quote. I don't see why this should be different.
Do you use name and address solely to be delightful or do you use it in other ways, like to order insurance score, clue or prefill any other 3rd party data for additional segmentation?
If it's simply checking one credit agency, you could let the user enter in a credit score from whatever credit agency you use to get a quote, but let the quote be contingent on their credit score exactly matching that.
"The reason we ask for your name first is because we want to create a more personal chat experience."
When I'm doing a research online before buying something, I really don't want "personal chat experience" with every dozen of companies which website I check. If I would -- add a phone number, Skype etc. in your contacts and I will call myself. Companies, that do not provide clear pricing, usually don't even make to my primary comparison table.
It looks like these are the companies that are really insuring you:
Lloyd’s of London, Berkshire Hathaway’s National Indemnity, XL Catlin etc.
Basically they are buying a policy from one of those companies adding 20% and selling it to you.
A insurance company works by spreading risk over a large area. By selling everything in NY they are increasing their correlation which raises risk. One of the reasons for the sub prime crisis was no one expected housing to fall in all markets at the same time.
There's a difference between insurance and reinsurance. It looks like they're only reinsured through those companies, but the policy itself is underwritten by Lemonade.
Reinsurance is basically insurance for the insurance co, for instance if a hurricane hits NYC and wipes out all of their policyholders at once.
(It's a bit complicated because there actually are many insurance co's that only sell insurance underwritten by a third party (although they may be able to offer lower price than buying from the third party directly because of how they target their customer base or handle claims), or sell insurance strictly on commission and outsource servicing claims, and there are varying forms of reinsurance that cover everything from huge tail risks to flat percentages of claims, or exotic circumstances like your corporate HQ burning down or massive lawsuits.)
It's funny you chose a hurricane as your scenario where an insurer needs coverage. A lot of insurance companies are issuing their own, more creative, instruments to avoid going through the reinsurance markets - especially 'catastrophe bonds,' which offer higher interest rates than normal bonds, but do not pay out in the event of a catastrophic event such as a hurricane.
NYC is a useful place to start in that it's a huge market and has some of the toughest regulation in the country.
If you're rental focused, stuff like hurricanes aren't as big a deal because most perils are excluded or out of scope. The roof is your landlord's problem.
You are right I guess they could be covering a majority of the claim, but I would guess their reinsurance percentage is probably a high percentage.
For example if the probability of fire is 1%, but due to their limited geographical focus they were covering an entire building of 30 apartment and their coverage is 100 dollars well their rate should be 1 dollar + x%, but if their is a fire their payout will be 3000 dollars due to that correlation of all the apartments burning down. In that case the reinsurance company would have to cover that.
If I were Berkshire I would have to price the policy higher for the increase risk.
Reinsurance isn't generally done on a percentage basis. It's generally done on a "the value of any single claim above X amount" basis. "X" is commonly around 1 million dollars.
The insurer pays 0-X, then the reinsurer (and their reinsurers respectively) pay X onwards.
What you've noted does exist, but the second line is more like building a 'tower' which is still in the primary layer. There's quite a bit of diversity in the reinsurance market so you're right about certain types, usually purchased by small businesses with large vehicles (cement mixers) who can't get enough in the primary.
But, in insurance companies buying insurance, there's some differences.
I'm not licensed but I do know the "Quota Share" structure is quite industry accepted for a few different lines (property being one, casualty, auto). So the % of risk retained versus ceded at various points to reinsurers is exactly the contract structure. Within that structure there are some limits and retentions that get hammered out during the contract and negotations ($XXX,XXX per occurrence of X, Y, Z, etc). But the point of this is that yes a company can retain XX% and reinsurers, usually several, split up dibs on the other XX%, sometimes in layers as well.
It's pretty interesting stuff and the numbers of what's out in the markets for underwriting is definitely an eye opener.
Just noticed, yeah you're right on the difference. I'm curious to what AM Best might rate Lemonade. Or how their numbers line up against some peers. A small part of me wonders how AM Best would look at the fraud potential versus other approaches - make a difference? Maybe no, maybe yes. Just thinking out loud.
They're not adding 20%, they're charging you a flat 20% and then paying for the policy on the back-end.
In that sense, it's like a buyers club for insurance. Lloyd's isn't insuring every Lemonade customer individually, they're insuring the entire Lemonade business, which with enough buy-in becomes a very diversified risk pool.
I'd be really surprised if their entire risk was reinsured; that tends to lead to severe incentive misalignment since they would have every incentive to sell to the riskiest customers they could find.
No, this is absolutely wrong. The housing crisis happened because people did not appropriately price risk and subprime mortgage bonds with poor underlying mortgages were rated highly and then leveraged 30:1 by banks like GS and BoA. An extra billion dollars in insurance exposure to the greater NY area will not precipitate the another financial crisis.
I happen to have been looking for renters insurance recently. I signed up immediately after reading the insurance policy terms. They are about as generous as the terms offered by Liberty Mutual, but LM wanted to charge me more than 3x as much, and I had a strange and frustrating conversation with a LM agent that left a bad taste in my mouth. Charity or no charity, it's a great deal.
However I made two mistakes. First, I selected personal property coverage that was probably too low. Second, I used a throwaway e-mail address to get my quote. I see no option in the app to modify either one. As I put in a support request for each item on the website, it occurred to me that I am probably screwed if anything goes wrong with my policy or claim. Yes, I am aware that there is an emergency hotline. But what happens if I'm no longer in an emergency? Insurance payouts can take a long time -- am I supposed to only ever interact with the company through a little "Help" popup on their website while I'm waiting for my check?
I'm also wondering: why is the actual interface to the application only available in a mobile app? What happens if my phone is damaged? Will I be forced to call the emergency hotline for even minor administrative tasks until I get a new phone? Is it that hard in 2016 to support web and mobile simultaneously?
Finally, I am sick to death of patronizing "I'm your friend" interactions with applications. The whole idea of "Maya" the robot assistant is goofy. It feels like a grown-up version of Smarterchild, and I get the same uncomfortable feeling "interacting" with Maya that I do when I'm trying to explain to a cheerful robot on the phone what I'm calling about.
Hey nerdponx!
This is Maya from Lemonade ; )
Please send us the correct email address you want us to use for your policy and we'll update it ASAP.
Also- you can call Lemonade even if it's not an emergency and someone from our customer care team will answer and help you out. Hope this helps
How is this more "P2P" than other insurance companies are? Non-profit, yes, but the mechanism seems to be the same. There is still a central pot everybody pays into.
I would like a non-profit that just pays back the spare money even more. I do not know how this would work with regulations. I guess in Germany this could be done through a "Genossenschaft", which Wikipedia tells me has an US equivalent called co-op. Would this actually work?
Edit: Realized that you could just grant discounts as there cannot be a profit anyway. Would be awesome to see several companies with the same model, first competing on prices and ultimately the percentage of the fixed fee.
The structure you describe is called "Versicherungsverein auf Gegenseitigkeit" in Germany. They are the oldest kind of insurance and still occupy a respectable portion of the market.
Public social insurance is even more P2P than that as dues are calculated based on actual payouts. This is most pronounced in the mandatory worker's accident insurance where employers just pay their share (based on size and risk profile) of last year's claims in their sector.
According to the video ("The Science Behind Lemonade") linked on the homepage, it seems the key difference is this company take a flat fee while other insurance company "makes profit" from declining claim , so the Lemonade has no incentive to decline a claim which makes the claim process fast;
and also they donate the extra profit to charity
That doesn't sound right -- a claim should be paid out or denied based on the veracity of the claim, not on the profit motive of the company. Sure, a for-profit company has extra incentive to vet claims, but so does Lemonade (since they dont want to be swindled).
Traditional insurance companies make their margins on the cash they have to hold on hand.
They're capitalizing on the lack of trust people have for typical insurance companies. Even though a claim "should be" paid out based on the veracity of the claim, I think there's a population that doesn't trust the insurance company to operate this way.
I'd agree with that. There's a general feeling that people are surprised when their insurance companies pay out/cover some big cost (like rot), rather than it just being part of life. That says something about how much we trust existing insurance companies.
It's generally difficult to find any form of funding/backing as a co-op, as it's far riskier when your sources of funding can't vet all the people who have legal power to push your organisation in a certain direction.
Not sure how to answer your question directly but perhaps you're missing a bigger point. The price and ease of use difference compared to legacy companies is huge.
Daniel from Lemonade here. Totally understand how P2P can be confusing as a term. What we mean by it is that we use each group's premiums to pay their claims, with leftover money going back to the group's common cause. To us P2P is a shorthand for: 'it's not our money'!
But the "P2P" branding is likely going to be confusing to a lot of people. In fact even after reading the explanation I still don't understand the peer to peer model in this context and I know what Peer to Peer means.
I was really hoping it was like the p2p lending where I choose who is in my insurance pool and thus my vetted circle bear eachother's costs, but not the costs of those outside my circle. So I can tell my stinky aunt that I wont underwrite her health insurance until she quits smoking.
I read some of the comments about the funnel and I set out to try it myself.
There are 8 steps to get a quote
1. First and last name
2. Full address
3. question (renter/owner)
4. roomates/alarm
5. current owner of insurance?
6. Jewelry over 1000$?
7. email, birthday
8. Quote, which seems highly generic and could be done without 6 of the 7 previous steps.
I can't even imagine the conversion rate from just checking it out to paying customer, it can't be too high at all (outside the founders circle).
ZipCode -> Quote should be the only step. The rest should happen after you convinced me about your value. By the way, don't email thisisridiculous@gmail.com, it's not really my email.
Valid points all, but if you were getting insurance from the traditional companies, you'd have to answer many more questions, or alternatively, pay for coverage you don't necessarily need. Our funnel tries to get you a personalized quote in minutes, so you pay for what you need. Most of the time this will be considerably lower than traditional carriers.
Just an idea: give a very general, estimated quote and refine it as people go to the next step. Then people that randomly browse are happy, and people who actually want to know their quote are happy.
It's a good idea, and as a random browser it'd make me happy, but people wouldn't be too thrilled if the price went up from the initial quote. Also if the initial is too high, it may scare some people off.
You're probably right about traditional insurance companies but didn't you say you're doing things different.
If you need all the steps (and I doubt it) at first, at least do something like what TypeForm are doing with a progress bar, explain a bit about why you need it etc...
Say the insurance conversion rate is somewhat similar to healthcare average around 9%, I am guessing you lose at least 40% that could have converted means you are left with something around 5-6% conversion rate. Not a sustainable business at this scale (IMHO of course).
There's no doubt that in order to be responsible, you need all of the information. We are in agreement on that. What I'm saying is you need to think of better ways to show the value and hook me before I go through all of the steps. Something simple 1-2 steps, later you can change that. It's worth an A/B test at least.
Insurers are able to offer lower base rates by differentiating customers on many other variables more indicative of risk than a zip code. Property insurance is more than just catastrophe insurance, you're also factoring in your history of claims, personal likelihood of having a claim, replacement and liability costs, etc. It's impossible to segment your quote off of just a zip code.
The way their questions are worded makes it feel like they're making a list of all of the renters/owners that have no alarms and have jewelry > $1000.. lol
Daniel from Lemonade here. Totally understand how P2P can be confusing as a term. What we mean by it is that we use each group's premiums to pay their claims, with leftover money going back to the group's common cause. To us P2P is a shorthand for: 'it's not our money'!
> What we mean by it is that we use each group's premiums to pay their claims, with leftover money going back to the group's common cause.
So using pension plans as an analogy, it's more like a pay as you go pension scheme, like Social Security, than a fully funded scheme where the capital is invested and the returns from investment pay expected payouts.
I guess the distinction is that since the leftover money is used to donate to causes, there's no buffer to handle any unusual payments in the scheme itself, and the scheme is insolvent immediately in any month where claims exceed payments. So any buffer has to come from the reinsurance contract, or from any equity capital invested in the entity writing the insurance contracts.
Is this accurate? Really interested if you tell me a little more about how you handle risk here.
Don't usually do this, but seconding this response because I'd really like to emphasize it and I'd love to hear some of these answers. Why not just return the extra as lower rates in the subsequent month or refunds instead of donating?
What you're doing is charging a flat fee to enter into a policy which is underwritten by someone else. its not sharing, its not anything special, its just insurance with a fancy GUI.
From what I can tell P2P means it's essentially an insurance co-op. It's definitely not a world first - I had renters insurance over 10 years ago that worked this way (except I got actual dividends instead of donations in my name).
If they pay claims super fast and earn no money saying "no", how, as a customer, can I be sure other customers do not make fake claims and decrease my share of leftover money? Or even make Lemonade unable to pay claims?
Health insurance is a whole new ballgame. But let's stick to P&C, and especially homeowners and renters, whereas companies are conflicted in paying out claims, as it impacts their bottom line. When they pay you your claim, they make less profits. So they're in this conflicted situation in which they have to decide between profiting, and paying your loss. A flat 20% removes that conflict and aligns interests.
In P&C it's closer to 28%, and for most of them that means agency commissions and such. That said, I think 20% expense is a bit wishful for a startup, but I hope I'm wrong and that it works out for you.
I will just assume that your 20% doesn't include LAE unless you're writing super preferred risk.
“Our initial application to the department was to give the money back to consumers. They were not going to do it as the laws are currently drafted,” said Daniel Schreiber.
They also stated they're hoping/looking to change those laws.
But are the limited by the sole fact that they incorporated as a benefit corporation? Mutual insurance exists in New York, so this seems like they are misleading..
So I tried out Maya and I just gotta say, great stuff! You ask for the bare minimum stuff, deduce the rest yourself, let the user play around with the numbers and give them an instant quote. Insurance is something a lot of people find intimidating and hard to approach as customers, and you have made it as simple as possible, explaining each item in an easy-to-understand way, letting the user know exactly what they signing up for, how much they are paying, and what they are getting.
Aren't all insurances in theory P2P? My naive understanding is that the insurance companies basically collect a lot of money from a large number on people, and then pay it out when needed? Basically, think of them as managers for the money. In addition they try to make the money work by placing bets on a lot of things and hope they make more than 1X.
Not trying to poke holes, but this sounds so interesting to me. This sounds similar to syndicates on the investment side.
A better -- but still not really P2P -- example of social insurance is https://wearesosure.com (UK mobile phone only for now)
With So-Sure you link up with friends and are bonused if nobody claims. Of course that means nobody links with that friend that always loses their phone, which in theory reduces their risk and pays for the bonus.
So... what are the supported causes? What is the criteria for a cause to be qualified for support?
There are charities and causes I do support and there are those that I don't. There are charities that oppose each other in their stated goals as well.
I see a section that talks about becoming a supported charity, but nothing about criteria or who is already in.
I would be surprised if it did not devolve into a kickback arrangement at some point. Benefit corps are a solution to a problem that doesn't really exist but gives a ton of leeway for under the table dealing. Not saying these guys have any particular reputation a priori, but when the structure is set up for it, it tends to happen sooner or later.
"Note, the Giveback is currently not recognized as a tax deductible donation- sorry!"
So it's actually worse than a standard mutual insurance dividend / rebate which you could donate yourself.
Hmmm. I think the interaction where it says that it is not yet available in my area and to try again with a New York address could be improved a little.
Go ahead and let me enter in my information and put me in some sort of potential new location queue-- get enough people near / around me, and you can start to decide where to support next.
At least, I know of https://heyguevara.com/ is a P2P car insurance provider in the UK that is registered with the FSA and licensed to provide insurance products. They've been operating for a couple of years now.
Are you guys getting a tax write off for the charitable donations from the surplus pool? If so, wouldn't that give Lemonade a financial incentive to decline payouts in favor increasing your bottom line and therefore negate the idea of having no stake in paying out legitimate claims?
The best form of insurance is self insurance, if you have some money on the side. Instead of paying someone to insure the risk (and get rich on top of the rent), I allocate a reasonable amount (5 figures) and put it on the side, and take the risk on myself.
I wouldn't go as far as calling it the "best" form. This can spread the risk over time-dimension of a single trajectory (i.e. your trajectory). Conventional Insurance has more space to spread the risk over: the trajectory of everyone who enlist themselves.
I have to say, I'm pretty excited by this. Mutual insurance companies have existed for a good while, but they're not easy to find. Having one that's married to great tech definitely makes me want to use it.
Honestly having to give the page all of my information before even being able to see a price or actually really even find out what it was selling turned me off.
The difference is that we're a fully regulated insurance company (as opposed to brokers like Guevara or other p2p insurance startups). It means that we can control the experience end to end and build an insurance company with a different business model than how traditional insurance companies do business. This is why we can give unclaimed money back to charity.
Hey, this is Maya from Lemonade, we believe people are inherently good and when faced with the option of embellishing their claim and pocketing more money or claiming what they deserve and make sure their cause receives the extra money left- most people (we hope) will choose the latter.
Hey, It's not necessarily more a deterrent than giving cash back. 1. we are not yet legally allowed to give money back to our users (but we're working on it) 2. some behavioral economic theories actually suggest that cash is less an incentive than other more altruistic incentives. Once our give back to consumers will be active- I'll guess we'll be able to put our theories to the test- hope this answers your question
Mutual insurance companies exist in New York. Are you not legally allowed to give money back solely because you decided to incorporate as a benefit corporation?
Hey, Gil from Lemonade here. I see quite a few p2p related comments here and I totally understand how P2P can be confusing as a term. This video can help understand the concept - https://www.youtube.com/watch?v=6U08uhV8c6Y.
tl;dr: We use each group's premiums to pay their claims, and unclaimed money goes back to the group's common cause.
Probably one of their "disruptions" to the current market comes from not rolling an adjuster out to your home for as many claims as possible. Send a video of your covered loss and they can evaluate your claim from anywhere in the world.
https://en.wikipedia.org/wiki/Mutual_insurance
https://en.wikipedia.org/wiki/The_Equitable_Life_Assurance_S...