It is one thing to pick a limited insurance product in one country, design a digital platform from scratch and then thumb a nose at incumbent and (mostly) analogue insurers.
They,the incumbent insurers, have a wide range of products including not just P&C and Life. From simple pet insurance and travel to auto, building, health to underwriting complex nuclear projects and civil engineering projects and handling major catastrophes.
They are moving from cure to prevention and joining the connected customer, home, vehicle, pet, journey, event, supply chain.......
Lemonade has started small and plans to evolve step by step. Insurers like Allianz, DLG, Legal & General, Aviva etc start big in product portfolios and global coverage and generally digitalise product by product and geography buy geography, The point is the speed is increasing and expertise getting better by the month.
It will be interesting to see how this game plays out. The major insurers have another big card if they play it right. DATA.
They have data across these products, customers and geographies. They generally only access about 10% today but some are adopting the tools to go above 50% and beyond. That offers the potential to plan and deploy better products, slash costs, increase efficiency and dramatically improve customer experience.
The fabled 90 second sign-up and claims settlement should be put in perspective. When major storms & hurricane strength winds hit the UK one insurer, DLG, settled major building and contents damage claims in dramatically short time. Not just in the centres of population like London and Manchester but far-flung islands like the Outer Hebrides. How? With a digital platform that combined people and technology to help those that suffered damage. World-record setting in its own right with a sign-up that was as impressive as Lemonade's 90 seconds.
Major insurers are adopting digital platforms that wrap around the core systems of record that do some things very well e.g. pay out. Some of these platforms are themselves complex, expensive and take a long time to deploy.
The killer digital platform is the one that major insurers have deployed in months and that delivers the digital customer experience that Lemonade delivers but on an industrial strength- breadth and depth.
That is not to undermine Lemonade's achievement which are to be applauded. it is a catalyst- or should be to savvy insurers.
My view is that as Lemonade and Global Insurers works inwards from their opposite ends of the digital transformation spectrum the new global leaders will come from a small number of established names.
The stakes are high- See "Winner takes most in digital transformation"
Interested to hear other views
Today's release is a great example of the reason behind our decision to take the longer, harder path in becoming a full stack insurance carrier, rather than a reseller. It also explains why we bet on building our own technology instead of taking the easy path of buying old-school IT systems (the ones that run most insurance companies in America today, and the startups that resell their insurance).