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{{about|an insurance company||Lemonade (disambiguation)}}
{{Infobox company
| name = Lemonade Insurance Company
| logo = https://www.lemonade.com/assets/logo-e0f7c4f109ef5af2bb9604137856587ca61a56ed8c3ab2b8f56fcec923babafc.svg
| caption =
| image =
| image_caption =
| type = Private
| industry = [[Insurance]]
| foundation = {{Start date and age|April 2015}}<br>[[New York City]], [[United States]]
| founders = Daniel Schreiber (CEO) & Shai Wininger (President)
| location = 5 Crosby Street
| location_city = [[New York City]]
| key_people =
| products = [[Home]] & [[Renters' insurance|Renters]] Insurance
| area_served = [[New York (state)|New York]], [[California]], [[Illinois]], [[New Jersey]], [[Rhode Island]], [[Texas]], [[Nevada]], [[Georgia (U.S. state)|Georgia]], [[Ohio]], [[Pennsylvania]], [[Maryland]], [[Iowa]], [[Wisconsin]], [[Arizona]], [[New Mexico]], and [[Washington, D.C.]]
| revenue =
| num_employees =
| parent =
| slogan =
| location_country = [[United States]]
| homepage = {{URL|https://www.lemonade.com}}
}}
'''Lemonade Insurance Company''' is an American [[Property insurance|property and casualty]] insurance company headquartered in [[New York City]] offering [[Renters' insurance|renters]] and [[Home insurance|home]] [[Insurance policy|insurance policies]] for homes, apartments, co-ops and condos.<ref>{{Cite news|url=https://www.nerdwallet.com/blog/insurance/lemonade-insurance-review-2017/|title=Lemonade Insurance Review 2017 - NerdWallet|date=2017-08-02|work=NerdWallet|access-date=2017-08-09|language=en-US}}</ref>
Operating in the [[Financial Services|fintech]] sector, Lemonade created a new business model for insurance based on [[behavioral economics]] and technology.<ref name=":2">{{Cite news|url=https://www.forbes.com/sites/jefffromm/2017/07/12/how-startup-lemonade-is-redefining-insurance-for-millennials/|title=How Startup Lemonade Is Redefining Insurance For Millennials|last=Fromm|first=Jeff|work=Forbes|access-date=2017-08-09|language=en}}</ref> The company uses [[artificial intelligence]] and [[Chatbot|chatbots]] to deliver insurance policies and handle claims for its users on desktop and mobile (through its iOS and Android applications) without employing the use of [[Insurance broker|insurance brokers]]. Social good is another aspect of the business model, where underwriting profits go to nonprofits of the customers’ choice, in the company's annual “Giveback<ref>{{Cite web|url=https://www.lemonade.com/giveback|title=The Lemonade Giveback & Social Good {{!}} Lemonade|website=www.lemonade.com|language=en|access-date=2018-05-31}}</ref>.”
Lemonade Inc., the parent company of Lemonade Insurance Company, was founded by Daniel Schreiber and Shai Wininger in April 2015, Lemonade launched its insurance company on September 21, 2016 in [[New York City]].<ref>{{Cite web|url=https://nypost.com/2016/09/21/peer-to-peer-insurer-lemonade-launches-in-new-york/|title=Peer-to-peer insurer Lemonade launches in New York|last=Covert|first=James|date=2016-09-22|website=New York Post|access-date=2017-08-09}}</ref> As of May 2018, Lemonade offers renters and home insurance policies in New York, California, Illinois, New Jersey, Rhode Island, Texas, Nevada, Georgia, Ohio, Pennsylvania, Maryland, Iowa, Wisconsin, Arizona, New Mexico, and the District of Columbia.<ref>{{Cite web|url=https://www.lemonade.com/lemonade-goes-nationwide|title=Renters & Home Insurance Across the US by 2017 {{!}} Lemonade|website=www.lemonade.com|language=en|access-date=2017-11-12}}</ref>
Lemonade Inc. is backed by investors including Aleph, [[General Catalyst]], [[GV (company)|GV]] (formerly Google Ventures), [[Sequoia Capital]], [[Thrive Capital]], [[XL Group|XL]], and Japanese tech investor, [[SoftBank Group|SoftBank]], having raised $120 million as of December 2017.<ref>{{Cite journal|date=2013|title=Plasmonics startup receives $1 million from venture capital firm|url=https://dx.doi.org/10.1063/pt.5.027153|journal=Physics Today|doi=10.1063/pt.5.027153|issn=1945-0699}}</ref>
== History ==
Lemonade was founded by veteran tech entrepreneurs, Daniel Schreiber (former President of [[Powermat Technologies|Powermat]]) and Shai Wininger (Co-Founder of [[Fiverr]]), in April 2015.<ref name=":3">{{Cite web|url=https://techcrunch.com/2015/12/08/sequoia-invests-13-million-in-a-seed-round-for-lemonade-which-is-looking-to-transform-insurance/|title=Sequoia Invests $13 Million In A Seed Round For Lemonade, Which Is Looking To Transform Insurance {{!}} TechCrunch|last=Shieber|first=Jonathan|access-date=2017-08-09}}</ref> While the two founders were relative newcomers to the insurance industry, they viewed it as an untapped opportunity given it $4.6 trillion market size and relative lack of technological innovation.<ref>{{Cite news|url=http://www.businessinsider.com/lemonade-daniel-schreiber-13-million-just-by-talking-2016-10|title=How Lemonade's founders raised a massive seed round just by talking|work=Business Insider|access-date=2017-08-09|language=en}}</ref>
As one of the least trusted sectors of the [[Economy of the United States|U.S. economy]], insurance ranks extremely low in all [[customer satisfaction]] categories.<ref>{{Cite web|url=http://www.ey.com/Publication/vwLUAssets/ey-2014-global-customer-insurance-survey/$FILE/ey-global-customer-insurance-survey.pdf|title=Reimagining customer relationships -Key findings from the EY Global Consumer Insurance Survey 2014|last=Ey|first=|date=2014|website=ey.com|archive-url=|archive-date=|dead-url=|access-date=}}</ref> With this in mind, Schreiber and Wininger set out to create a new insurance model that would change up the industry’s misalignment of incentives towards consumers while promoting social good by focusing on behavioral economics and transparency.<ref name=":4">{{Cite web|url=https://techcrunch.com/2016/02/24/still-stealthy-new-insurance-company-lemonade-continues-to-impress-with-new-hire-dan-ariely/|title=Still Stealthy, New Insurance Company Lemonade Continues To Impress With New Hire, Dan Ariely {{!}} TechCrunch|last=Shieber|first=Jonathan|access-date=2017-08-09}}</ref>
=== Key personnel ===
Daniel Schreiber is Co-Founder and CEO of Lemonade. In his previous position as President of Powermat, Schreiber oversaw its transformation into an industry standard and a default feature in the world's foremost [[smartphones]] ([[Samsung Galaxy]]), venues ([[Starbucks]]) and cars ([[General Motors|GM]]).<ref name=":0">{{Cite web|url=https://www.crunchbase.com/person/daniel-schreiber-2|title=Daniel Schreiber - CEO, Co-Founder @ Lemonade {{!}} crunchbase|website=www.crunchbase.com|access-date=2017-08-09}}</ref> Prior to Powermat, he served as [[Vice president#In business|SVP]] Corporate Marketing at [[SanDisk|Sandisk]], with global responsibility for the company’s social media, press relations, 50 web and ecommerce sites and major rebranding.<ref name=":0" />
Shai Wininger is a veteran tech entrepreneur and [[Inventor (patent)|inventor]]; Lemonade is Wininger’s seventh startup.<ref name=":1">{{Cite web|url=https://www.crunchbase.com/person/shai-wininger#/entity|title=Shai Wininger - Co-Founder, Chief Lemonade Maker & President @ Lemonade {{!}} crunchbase|website=www.crunchbase.com|access-date=2017-08-09}}</ref> Wininger is the Co-Founder and "Chief Lemonade Maker" at Lemonade and is currently a [[Board of directors|Board Member]] at Fiverr which he co-founded in 2009. Wininger also co-founded Mobideo Aerospace (2005), Handsmart Software (2003), DailyDo (2000), Trimus Inc. (2000), and Ananas Group (1991).<ref name=":1" />
[[Duke University]] [[professor]], [[author]] and [[economist]], [[Dan Ariely]] is Chief Behavioral Officer at Lemonade with much of his research on behavioral economics integrated into the [[DNA]] of the company, in pursuit of transforming the adversarial relationship between client and company.<ref>{{Cite news|url=http://www.businessinsider.com/dan-ariely-joins-lemonade-insurance-2016-2|title=A top psychologist says insurance sucks, so he's joining a startup to fix it|work=Business Insider|access-date=2017-08-09|language=en}}</ref> Ariely is tasked, in part, with helping design systems and processes that ensure that the interests of the insurer and the insured are aligned.<ref name=":4" />
=== Funding ===
In December 2015, Lemonade Inc. announced that it secured $13 million in [[Seed money|seed funding]] from Sequoia Capital and Aleph.<ref name=":3" /> In August 2016, Lemonade Inc. raised $13 million in funding from XL Innovate (part of [[XL Group]]), followed by a $34 million [[Venture round#Round names|Series B]] funding round in December of the same year.<ref>{{Cite web|url=http://www.prnewswire.com/news-releases/lemonade-announces-additional-funding-by-xl-innovate-591015041.html|title=Lemonade Announces Additional Funding by XL Innovate|last=Lemonade|website=www.prnewswire.com|language=en|access-date=2017-08-09}}</ref> The Series B round was led by General Catalyst with participation from [[Joshua Kushner|Thrive Capital]], [[Bradley Tusk|Tusk Ventures]], and GV (formerly Google Ventures), the VC arm of Google’s parent company [[Alphabet Inc.|Alphabet Inc]].<ref>{{Cite news|url=http://www.businessinsider.com/google-participates-in-lemonades-34m-round-2016-12|title=Google participates in Lemonade's $34M round|work=Business Insider|access-date=2017-08-09|language=en}}</ref>
In April 2017, the company announced additional investors: [[Allianz|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.<ref>{{Cite web|url=https://news.crunchbase.com/news/lemonade-raises-120m-series-c-softbanks-third-investment-property-startup/|title=Lemonade Raises A $120M Series C, Softbank's Fourth Investment Into A Property Startup|last=|first=|date=|website=www.crunchbase.com|archive-url=|archive-date=|dead-url=|access-date=2018-05-20}}</ref>
=== Financials ===
A full-stack insurance company, Lemonade underwrites its own policies and is reinsured at [[Lloyd's of London|Lloyd’s of London]].<ref>{{Cite news|url=http://www.insurancejournal.com/news/national/2016/02/09/398087.htm|title=Leading Reinsurers Line Up for Lemonade, the P2P Insurer|date=2016-02-09|work=Insurance Journal|access-date=2017-08-09|language=en-US}}</ref>
Lemonade’s financial stability is rated A-Exceptional, by [[Ohio]]-based financial analysis firm Demotech.<ref>{{Cite web|url=http://www.demotech.com/search_results_fsr.aspx?id=16023&t=2|title=Financial Stability Ratings®: Demotech|website=www.demotech.com|access-date=2017-08-09}}</ref>
== Business model ==
Lemonade’s [[business model]] differs from that of typical insurance companies; Lemonade keeps a flat 20% fee of a customer’s [[Risk premium|premium]] while setting aside the remaining 80% to pay claims and purchase reinsurance.<ref name="theguardian_2017-01-28"/> Unclaimed premiums go to a nonprofit of the user’s choosing in an annual “Giveback.”<ref name=":5">{{Cite news|url=http://www.mymoneyblog.com/lemonade-vs-mutual-insurance.html|title=How is Lemonade Different Than Mutual Insurance?|date=2017-04-10|work=My Money Blog|access-date=2017-08-09|language=en-US}}</ref>
=== Technology ===
Lemonade uses artificial intelligence in the form of chatbots and [[machine learning]] to provide insurance policies and handle claims, replacing brokers and paperwork traditionally associated with the process.<ref>{{Cite web|url=http://www.the-digital-insurer.com/blog/insurtech-lemonade-are-here-and-insurance-will-never-be-the-same-again/|title=Lemonade are Live. Insurance will never be the same again!|website=www.the-digital-insurer.com|language=en-US|access-date=2017-08-09}}</ref> When a customer applies for insurance, the company’s software pulls data and cross-references information about a particular home or neighborhood from a variety of sources.<ref name="theguardian_2017-01-28"/> Policyholders file claims through Lemonade’s app with the company’s chatbot ‘A.I. Jim’ who reviews the claim, cross-checks it with the policy, runs 18-[[fraud]] [[algorithms]], and determines whether or not to approve the claim.<ref name=":6">{{Cite web|url=https://www.economist.com/news/finance-and-economics/21718502-future-insurance-named-after-soft-drink-new-york-startup-shakes-up|title=A New York startup shakes up the insurance business|website=The Economist|access-date=2017-08-09}}</ref>
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.<ref name=":6" />
=== Behavioral economics ===
Lemonade uses behavioral economics research to displace fraud and conflict while aligning interests to remove motivation for not paying claims and keeping the inclination to defraud an insurer in check.<ref name=":2" /> Integration of these principles are found in Lemonade’s policy purchase and claims processes, with users signing their name on a digital pledge of honesty at the start of the claims process - rather than the end - and speaking into a camera to file a claim rather than using forms.<ref>{{Cite news|url=https://www.fastcompany.com/3068506/lemonade-is-using-behavioral-science-to-onboard-customers-and-keep-them-honest|title=Lemonade Is Using Behavioral Science To Onboard Customers And Keep Them Honest|date=2017-03-17|work=Fast Company|access-date=2017-08-09|language=en-US}}</ref> The company is also applying principles of [[Behavioural sciences|behavioral science]] to itself, publishing articles on data surrounding customer growth, and bank account balances, among other topics.<ref>{{Cite web|url=https://www.lemonade.com/blog/category/transparency/|title=Finding Transparency in the Insurance Industry {{!}} Lemonade Blog|website=Lemonade Blog|language=en-US|access-date=2017-08-09}}</ref>
=== Social good ===
Lemonade Inc. which is registered as a [[Public-benefit corporation|public benefit corporation]], has a stated mission of ‘transforming insurance from a necessary evil into a social good." This includes the Giveback, the charity component of the business model which is also an attempt to mitigate fraudulent insurance claims.<ref name="theguardian_2017-01-28"/> 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.<ref>{{Cite web|url=https://techcrunch.com/2016/09/21/less-exciting-than-beyonces-album-but-potentially-more-rewarding-lemonade-launches-a-new-way-to-do-insurance/|title=Less exciting than Beyonce’s album, but maybe more rewarding, Lemonade launches new insurance plans {{!}} TechCrunch|last=Shieber|first=Jonathan|access-date=2017-08-09}}</ref>
This annual donation is known as a “Giveback.”<ref name=":5" /> Companies chosen by Lemonade users include: [[Charity: Water]], [[Citymeals-on-Wheels|Citymeals-on-wheels]], New Story, [[Robin Hood Foundation]], Women in Need (WIN), [[American Civil Liberties Union|ACLU]], [[American Red Cross]], Code to Inspire, Evolve Creative Alliance, [[Feeding America]], [[Make-A-Wish Foundation|Make-a-Wish Foundation]], [[MEET - Middle East Entrepreneurs of Tomorrow]], [[New York Society for the Prevention of Cruelty to Children]], [[Teach for america|Teach for America]], and [[The Trevor Project]].
In May 2016, Lemonade became one of the only insurance companies to receive [[B Corporation (certification)|B-Corporation]] certification.<ref>{{Cite web|url=http://www.insurancebusinessmag.com/au/news/breaking-news/major-disruptor-lemonade-in-double-industry-first-57508.aspx|title=Major disruptor Lemonade in double industry first|last=Lynn|first=Jordan|website=Insurance Business|access-date=2017-08-09}}</ref>
== Reception ==
Within the first 48 hours of launching in New York in 2016, Lemonade reported that 36,000 people visited their site, 140 of which purchased policies equating to $14,300 in gross written premiums.<ref>{{Cite web |url=https://www.lemonade.com/the_first_48_hours |title=Lemonade: The First 48 Hours in Insurance |website=www.lemonade.com |language=en |access-date=2017-08-16}}</ref> After the first 100 days, the company released a follow-up report noting that 2,000 people signed up for Lemonade, with over 80% of this statistic composed of first-time insurance buyers.<ref name=":6" /> By June 2017, 14,315 customers signed up for a Lemonade insurance policy.<ref>{{Cite web|url=https://www.crowdfundinsider.com/2017/06/101283-lemonade-updates-platform-growth-adds-14300-customers-8-months/|title=Lemonade Updates on Platform Growth. Adds 14,300 Customers in 8 Months|date=2017-06-01|website=Crowdfund Insider|access-date=2017-08-09}}</ref>
Lemonade was recognized as one of the NYC startups ready to take on 2017, by [[Inc. (magazine)|Inc]].<ref>{{Cite news|url=https://www.inc.com/yoav-vilner/17-nyc-based-startups-ready-to-take-on-2017.html|title=17 NYC-Based Startups Ready to Take On 2017|date=2016-12-25|work=Inc.com|access-date=2017-08-09|language=en}}</ref> It was also recognized as one of the top 25 tech companies to watch, by the [[Wall Street Journal]].<ref>{{Cite web|url=https://www.wsj.com/graphics/25-technology-companies-to-watch/|title=Top 25 Tech Companies to Watch|last=Graphics|first=WSJ com News|website=WSJ|access-date=August 9, 2017}}</ref>
== See also ==
* [[List of United States insurance companies]]
== References ==
{{Reflist|30em|refs=
<ref name="theguardian_2017-01-28">{{Cite news|url=https://www.theguardian.com/sustainable-business/2017/jan/28/insurance-company-lemonde-claims|title=How artificial intelligence could help make the insurance industry trustworthy|last=Moodie|first=Alison|date=2017-01-28|work=The Guardian|access-date=2017-08-09|language=en-GB|issn=0261-3077}}</ref>
}}
[[Category:Insurance companies based in New York City]]
[[Category:Insurance companies based in New York (state)]]
[[Category:Insurance companies of the United States]]
[[Category:American companies established in 2015]]
[[Category:Online insurance companies]]
[[Category:Property insurance]]
[[Category:Benefit corporations]]
{{Infobox company
| name = Lemonade Insurance Company
| logo = https://www.lemonade.com/assets/logo-e0f7c4f109ef5af2bb9604137856587ca61a56ed8c3ab2b8f56fcec923babafc.svg
| caption =
| image =
| image_caption =
| type = Private
| industry = [[Insurance]]
| foundation = {{Start date and age|April 2015}}<br>[[New York City]], [[United States]]
| founders = Daniel Schreiber (CEO) & Shai Wininger (President)
| location = 5 Crosby Street
| location_city = [[New York City]]
| key_people =
| products = [[Home]] & [[Renters' insurance|Renters]] Insurance
| area_served = [[New York (state)|New York]], [[California]], [[Illinois]], [[New Jersey]], [[Rhode Island]], [[Texas]], [[Nevada]], [[Georgia (U.S. state)|Georgia]], [[Ohio]], [[Pennsylvania]], [[Maryland]], [[Iowa]], [[Wisconsin]], [[Arizona]], [[New Mexico]], and [[Washington, D.C.]]
| revenue =
| num_employees =
| parent =
| slogan =
| location_country = [[United States]]
| homepage = {{URL|https://www.lemonade.com}}
}}
'''Lemonade Insurance Company''' is an American [[Property insurance|property and casualty]] insurance company headquartered in [[New York City]] offering [[Renters' insurance|renters]] and [[Home insurance|home]] [[Insurance policy|insurance policies]] for homes, apartments, co-ops and condos.<ref>{{Cite news|url=https://www.nerdwallet.com/blog/insurance/lemonade-insurance-review-2017/|title=Lemonade Insurance Review 2017 - NerdWallet|date=2017-08-02|work=NerdWallet|access-date=2017-08-09|language=en-US}}</ref>
Operating in the [[Financial Services|fintech]] sector, Lemonade created a new business model for insurance based on [[behavioral economics]] and technology.<ref name=":2">{{Cite news|url=https://www.forbes.com/sites/jefffromm/2017/07/12/how-startup-lemonade-is-redefining-insurance-for-millennials/|title=How Startup Lemonade Is Redefining Insurance For Millennials|last=Fromm|first=Jeff|work=Forbes|access-date=2017-08-09|language=en}}</ref> The company uses [[artificial intelligence]] and [[Chatbot|chatbots]] to deliver insurance policies and handle claims for its users on desktop and mobile (through its iOS and Android applications) without employing the use of [[Insurance broker|insurance brokers]]. Social good is another aspect of the business model, where underwriting profits go to nonprofits of the customers’ choice, in the company's annual “Giveback<ref>{{Cite web|url=https://www.lemonade.com/giveback|title=The Lemonade Giveback & Social Good {{!}} Lemonade|website=www.lemonade.com|language=en|access-date=2018-05-31}}</ref>.”
Lemonade Inc., the parent company of Lemonade Insurance Company, was founded by Daniel Schreiber and Shai Wininger in April 2015, Lemonade launched its insurance company on September 21, 2016 in [[New York City]].<ref>{{Cite web|url=https://nypost.com/2016/09/21/peer-to-peer-insurer-lemonade-launches-in-new-york/|title=Peer-to-peer insurer Lemonade launches in New York|last=Covert|first=James|date=2016-09-22|website=New York Post|access-date=2017-08-09}}</ref> As of May 2018, Lemonade offers renters and home insurance policies in New York, California, Illinois, New Jersey, Rhode Island, Texas, Nevada, Georgia, Ohio, Pennsylvania, Maryland, Iowa, Wisconsin, Arizona, New Mexico, and the District of Columbia.<ref>{{Cite web|url=https://www.lemonade.com/lemonade-goes-nationwide|title=Renters & Home Insurance Across the US by 2017 {{!}} Lemonade|website=www.lemonade.com|language=en|access-date=2017-11-12}}</ref>
Lemonade Inc. is backed by investors including Aleph, [[General Catalyst]], [[GV (company)|GV]] (formerly Google Ventures), [[Sequoia Capital]], [[Thrive Capital]], [[XL Group|XL]], and Japanese tech investor, [[SoftBank Group|SoftBank]], having raised $120 million as of December 2017.<ref>{{Cite journal|date=2013|title=Plasmonics startup receives $1 million from venture capital firm|url=https://dx.doi.org/10.1063/pt.5.027153|journal=Physics Today|doi=10.1063/pt.5.027153|issn=1945-0699}}</ref>
== History ==
Lemonade was founded by veteran tech entrepreneurs, Daniel Schreiber (former President of [[Powermat Technologies|Powermat]]) and Shai Wininger (Co-Founder of [[Fiverr]]), in April 2015.<ref name=":3">{{Cite web|url=https://techcrunch.com/2015/12/08/sequoia-invests-13-million-in-a-seed-round-for-lemonade-which-is-looking-to-transform-insurance/|title=Sequoia Invests $13 Million In A Seed Round For Lemonade, Which Is Looking To Transform Insurance {{!}} TechCrunch|last=Shieber|first=Jonathan|access-date=2017-08-09}}</ref> While the two founders were relative newcomers to the insurance industry, they viewed it as an untapped opportunity given it $4.6 trillion market size and relative lack of technological innovation.<ref>{{Cite news|url=http://www.businessinsider.com/lemonade-daniel-schreiber-13-million-just-by-talking-2016-10|title=How Lemonade's founders raised a massive seed round just by talking|work=Business Insider|access-date=2017-08-09|language=en}}</ref>
As one of the least trusted sectors of the [[Economy of the United States|U.S. economy]], insurance ranks extremely low in all [[customer satisfaction]] categories.<ref>{{Cite web|url=http://www.ey.com/Publication/vwLUAssets/ey-2014-global-customer-insurance-survey/$FILE/ey-global-customer-insurance-survey.pdf|title=Reimagining customer relationships -Key findings from the EY Global Consumer Insurance Survey 2014|last=Ey|first=|date=2014|website=ey.com|archive-url=|archive-date=|dead-url=|access-date=}}</ref> With this in mind, Schreiber and Wininger set out to create a new insurance model that would change up the industry’s misalignment of incentives towards consumers while promoting social good by focusing on behavioral economics and transparency.<ref name=":4">{{Cite web|url=https://techcrunch.com/2016/02/24/still-stealthy-new-insurance-company-lemonade-continues-to-impress-with-new-hire-dan-ariely/|title=Still Stealthy, New Insurance Company Lemonade Continues To Impress With New Hire, Dan Ariely {{!}} TechCrunch|last=Shieber|first=Jonathan|access-date=2017-08-09}}</ref>
=== Key personnel ===
Daniel Schreiber is Co-Founder and CEO of Lemonade. In his previous position as President of Powermat, Schreiber oversaw its transformation into an industry standard and a default feature in the world's foremost [[smartphones]] ([[Samsung Galaxy]]), venues ([[Starbucks]]) and cars ([[General Motors|GM]]).<ref name=":0">{{Cite web|url=https://www.crunchbase.com/person/daniel-schreiber-2|title=Daniel Schreiber - CEO, Co-Founder @ Lemonade {{!}} crunchbase|website=www.crunchbase.com|access-date=2017-08-09}}</ref> Prior to Powermat, he served as [[Vice president#In business|SVP]] Corporate Marketing at [[SanDisk|Sandisk]], with global responsibility for the company’s social media, press relations, 50 web and ecommerce sites and major rebranding.<ref name=":0" />
Shai Wininger is a veteran tech entrepreneur and [[Inventor (patent)|inventor]]; Lemonade is Wininger’s seventh startup.<ref name=":1">{{Cite web|url=https://www.crunchbase.com/person/shai-wininger#/entity|title=Shai Wininger - Co-Founder, Chief Lemonade Maker & President @ Lemonade {{!}} crunchbase|website=www.crunchbase.com|access-date=2017-08-09}}</ref> Wininger is the Co-Founder and "Chief Lemonade Maker" at Lemonade and is currently a [[Board of directors|Board Member]] at Fiverr which he co-founded in 2009. Wininger also co-founded Mobideo Aerospace (2005), Handsmart Software (2003), DailyDo (2000), Trimus Inc. (2000), and Ananas Group (1991).<ref name=":1" />
[[Duke University]] [[professor]], [[author]] and [[economist]], [[Dan Ariely]] is Chief Behavioral Officer at Lemonade with much of his research on behavioral economics integrated into the [[DNA]] of the company, in pursuit of transforming the adversarial relationship between client and company.<ref>{{Cite news|url=http://www.businessinsider.com/dan-ariely-joins-lemonade-insurance-2016-2|title=A top psychologist says insurance sucks, so he's joining a startup to fix it|work=Business Insider|access-date=2017-08-09|language=en}}</ref> Ariely is tasked, in part, with helping design systems and processes that ensure that the interests of the insurer and the insured are aligned.<ref name=":4" />
=== Funding ===
In December 2015, Lemonade Inc. announced that it secured $13 million in [[Seed money|seed funding]] from Sequoia Capital and Aleph.<ref name=":3" /> In August 2016, Lemonade Inc. raised $13 million in funding from XL Innovate (part of [[XL Group]]), followed by a $34 million [[Venture round#Round names|Series B]] funding round in December of the same year.<ref>{{Cite web|url=http://www.prnewswire.com/news-releases/lemonade-announces-additional-funding-by-xl-innovate-591015041.html|title=Lemonade Announces Additional Funding by XL Innovate|last=Lemonade|website=www.prnewswire.com|language=en|access-date=2017-08-09}}</ref> The Series B round was led by General Catalyst with participation from [[Joshua Kushner|Thrive Capital]], [[Bradley Tusk|Tusk Ventures]], and GV (formerly Google Ventures), the VC arm of Google’s parent company [[Alphabet Inc.|Alphabet Inc]].<ref>{{Cite news|url=http://www.businessinsider.com/google-participates-in-lemonades-34m-round-2016-12|title=Google participates in Lemonade's $34M round|work=Business Insider|access-date=2017-08-09|language=en}}</ref>
In April 2017, the company announced additional investors: [[Allianz|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.<ref>{{Cite web|url=https://news.crunchbase.com/news/lemonade-raises-120m-series-c-softbanks-third-investment-property-startup/|title=Lemonade Raises A $120M Series C, Softbank's Fourth Investment Into A Property Startup|last=|first=|date=|website=www.crunchbase.com|archive-url=|archive-date=|dead-url=|access-date=2018-05-20}}</ref>
=== Financials ===
A full-stack insurance company, Lemonade underwrites its own policies and is reinsured at [[Lloyd's of London|Lloyd’s of London]].<ref>{{Cite news|url=http://www.insurancejournal.com/news/national/2016/02/09/398087.htm|title=Leading Reinsurers Line Up for Lemonade, the P2P Insurer|date=2016-02-09|work=Insurance Journal|access-date=2017-08-09|language=en-US}}</ref>
Lemonade’s financial stability is rated A-Exceptional, by [[Ohio]]-based financial analysis firm Demotech.<ref>{{Cite web|url=http://www.demotech.com/search_results_fsr.aspx?id=16023&t=2|title=Financial Stability Ratings®: Demotech|website=www.demotech.com|access-date=2017-08-09}}</ref>
== Business model ==
Lemonade’s [[business model]] differs from that of typical insurance companies; Lemonade keeps a flat 20% fee of a customer’s [[Risk premium|premium]] while setting aside the remaining 80% to pay claims and purchase reinsurance.<ref name="theguardian_2017-01-28"/> Unclaimed premiums go to a nonprofit of the user’s choosing in an annual “Giveback.”<ref name=":5">{{Cite news|url=http://www.mymoneyblog.com/lemonade-vs-mutual-insurance.html|title=How is Lemonade Different Than Mutual Insurance?|date=2017-04-10|work=My Money Blog|access-date=2017-08-09|language=en-US}}</ref>
=== Technology ===
Lemonade uses artificial intelligence in the form of chatbots and [[machine learning]] to provide insurance policies and handle claims, replacing brokers and paperwork traditionally associated with the process.<ref>{{Cite web|url=http://www.the-digital-insurer.com/blog/insurtech-lemonade-are-here-and-insurance-will-never-be-the-same-again/|title=Lemonade are Live. Insurance will never be the same again!|website=www.the-digital-insurer.com|language=en-US|access-date=2017-08-09}}</ref> When a customer applies for insurance, the company’s software pulls data and cross-references information about a particular home or neighborhood from a variety of sources.<ref name="theguardian_2017-01-28"/> Policyholders file claims through Lemonade’s app with the company’s chatbot ‘A.I. Jim’ who reviews the claim, cross-checks it with the policy, runs 18-[[fraud]] [[algorithms]], and determines whether or not to approve the claim.<ref name=":6">{{Cite web|url=https://www.economist.com/news/finance-and-economics/21718502-future-insurance-named-after-soft-drink-new-york-startup-shakes-up|title=A New York startup shakes up the insurance business|website=The Economist|access-date=2017-08-09}}</ref>
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.<ref name=":6" />
=== Behavioral economics ===
Lemonade uses behavioral economics research to displace fraud and conflict while aligning interests to remove motivation for not paying claims and keeping the inclination to defraud an insurer in check.<ref name=":2" /> Integration of these principles are found in Lemonade’s policy purchase and claims processes, with users signing their name on a digital pledge of honesty at the start of the claims process - rather than the end - and speaking into a camera to file a claim rather than using forms.<ref>{{Cite news|url=https://www.fastcompany.com/3068506/lemonade-is-using-behavioral-science-to-onboard-customers-and-keep-them-honest|title=Lemonade Is Using Behavioral Science To Onboard Customers And Keep Them Honest|date=2017-03-17|work=Fast Company|access-date=2017-08-09|language=en-US}}</ref> The company is also applying principles of [[Behavioural sciences|behavioral science]] to itself, publishing articles on data surrounding customer growth, and bank account balances, among other topics.<ref>{{Cite web|url=https://www.lemonade.com/blog/category/transparency/|title=Finding Transparency in the Insurance Industry {{!}} Lemonade Blog|website=Lemonade Blog|language=en-US|access-date=2017-08-09}}</ref>
=== Social good ===
Lemonade Inc. which is registered as a [[Public-benefit corporation|public benefit corporation]], has a stated mission of ‘transforming insurance from a necessary evil into a social good." This includes the Giveback, the charity component of the business model which is also an attempt to mitigate fraudulent insurance claims.<ref name="theguardian_2017-01-28"/> 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.<ref>{{Cite web|url=https://techcrunch.com/2016/09/21/less-exciting-than-beyonces-album-but-potentially-more-rewarding-lemonade-launches-a-new-way-to-do-insurance/|title=Less exciting than Beyonce’s album, but maybe more rewarding, Lemonade launches new insurance plans {{!}} TechCrunch|last=Shieber|first=Jonathan|access-date=2017-08-09}}</ref>
This annual donation is known as a “Giveback.”<ref name=":5" /> Companies chosen by Lemonade users include: [[Charity: Water]], [[Citymeals-on-Wheels|Citymeals-on-wheels]], New Story, [[Robin Hood Foundation]], Women in Need (WIN), [[American Civil Liberties Union|ACLU]], [[American Red Cross]], Code to Inspire, Evolve Creative Alliance, [[Feeding America]], [[Make-A-Wish Foundation|Make-a-Wish Foundation]], [[MEET - Middle East Entrepreneurs of Tomorrow]], [[New York Society for the Prevention of Cruelty to Children]], [[Teach for america|Teach for America]], and [[The Trevor Project]].
In May 2016, Lemonade became one of the only insurance companies to receive [[B Corporation (certification)|B-Corporation]] certification.<ref>{{Cite web|url=http://www.insurancebusinessmag.com/au/news/breaking-news/major-disruptor-lemonade-in-double-industry-first-57508.aspx|title=Major disruptor Lemonade in double industry first|last=Lynn|first=Jordan|website=Insurance Business|access-date=2017-08-09}}</ref>
== Reception ==
Within the first 48 hours of launching in New York in 2016, Lemonade reported that 36,000 people visited their site, 140 of which purchased policies equating to $14,300 in gross written premiums.<ref>{{Cite web |url=https://www.lemonade.com/the_first_48_hours |title=Lemonade: The First 48 Hours in Insurance |website=www.lemonade.com |language=en |access-date=2017-08-16}}</ref> After the first 100 days, the company released a follow-up report noting that 2,000 people signed up for Lemonade, with over 80% of this statistic composed of first-time insurance buyers.<ref name=":6" /> By June 2017, 14,315 customers signed up for a Lemonade insurance policy.<ref>{{Cite web|url=https://www.crowdfundinsider.com/2017/06/101283-lemonade-updates-platform-growth-adds-14300-customers-8-months/|title=Lemonade Updates on Platform Growth. Adds 14,300 Customers in 8 Months|date=2017-06-01|website=Crowdfund Insider|access-date=2017-08-09}}</ref>
Lemonade was recognized as one of the NYC startups ready to take on 2017, by [[Inc. (magazine)|Inc]].<ref>{{Cite news|url=https://www.inc.com/yoav-vilner/17-nyc-based-startups-ready-to-take-on-2017.html|title=17 NYC-Based Startups Ready to Take On 2017|date=2016-12-25|work=Inc.com|access-date=2017-08-09|language=en}}</ref> It was also recognized as one of the top 25 tech companies to watch, by the [[Wall Street Journal]].<ref>{{Cite web|url=https://www.wsj.com/graphics/25-technology-companies-to-watch/|title=Top 25 Tech Companies to Watch|last=Graphics|first=WSJ com News|website=WSJ|access-date=August 9, 2017}}</ref>
== See also ==
* [[List of United States insurance companies]]
== References ==
{{Reflist|30em|refs=
<ref name="theguardian_2017-01-28">{{Cite news|url=https://www.theguardian.com/sustainable-business/2017/jan/28/insurance-company-lemonde-claims|title=How artificial intelligence could help make the insurance industry trustworthy|last=Moodie|first=Alison|date=2017-01-28|work=The Guardian|access-date=2017-08-09|language=en-GB|issn=0261-3077}}</ref>
}}
[[Category:Insurance companies based in New York City]]
[[Category:Insurance companies based in New York (state)]]
[[Category:Insurance companies of the United States]]
[[Category:American companies established in 2015]]
[[Category:Online insurance companies]]
[[Category:Property insurance]]
[[Category:Benefit corporations]]
