Tech start-up’s ambitious claims look unconvincing
Whilst the key focus in this article is the SoftBank money pitcher running out the pertinent question is how incumbent carriers act.
They can, and are, launching digitally transformed means of buying products for the current time. They are also transforming claims and and can equal and even better Lemonade's performance. "3 seconds! Why not immediately?"
And they have a large customer base across multiple product categories and geographies.
It only needs 20% of carriers to do this properly as they will dominate industry profits and leave a long tail of struggling insurers eating a thin gruel of narrow margins.
Not to say Lemonade won't succeed. It has very bright people with data mastery skills and is not hobbled by legacy systems and cultures. But the innovative insurers can match and outstrip hat.
Interesting times
Making insurance more delightful is a noble, if unorthodox, goal. Sparky insurance tech start-up Lemonade’s market listing document brims with such ambitions. A charity-linked business model promises to draw in young consumers while “artificial intelligence, contemporary design and behavioral economics” improves underwriting efficiency. Incumbents tartly retort that the glass is half full. Until Lemonade manages to make a profit on its underwriting, its claims look unconvincing.
https://www.ft.com/content/58c42412-3e91-46d4-833e-1e11806c5057
