A really interesting analysis and poses some tough questions on Lemonade and their performance to date.
Their use of reinsurance (91%) and early stage ratios makes some eye watering reading. However, we shouldn't be surprised. If you look at what a start-up often needs beyond distribution/customer acquisition it's:
1. Access to capital
2. Regulator access
It's early days still, Lemonade have convinced the right investors and incumbents to do something different, customer satisfaction is good and they have everyone's attention.
As Yoda would say, there is no try, just do or do not. Lemonade is doing!
“The real key performance indicators are retention, combined ratios and customer satisfaction. Those will take years to sort out,” says the founder and chief underwriting officer of US flood/catastrophe MGA, reThought Insurance. “Are they truly in it for the customer? Do they really want to revolutionise the business model or is the exit strategy already in place?” The company sells itself in part on its use of AI. But it says that its famous three-second paying artificial intelligence claims bot, AI Jim, handles only around a quarter of claims without human intervention.