How Lemonade is Fixing a Broken System

September 2016 – Team Lemonade embarked on a journey to fix a broken system. A system that, for centuries, wanted to protect you when things went wrong, but often put you through hurdles and obstacles and left you stranded.

Insurance was first created to help communities thrive. Neighbors having each other’s backs when needed, sharing risks, and creating circles of trust. That sort of insurance lost its way, becoming a bureaucratic maze awash with endless paperwork and never ending phone calls with agents.

There’s something inherently wrong with an industry that consistently frustrates its consumers. What’s more frustrating is that these insurance giants channel their billions of dollars to big bonuses, instead of delighting their customers.

Fixing a Broken System with Lemonade Insurance

Lemonade is designed differently

We’re using technology to bring insurance into the 21st century, but we’re also transforming the very fundamental business model. Instead of making our money from denying claims, as is the norm within the industry, we treat your premiums as if it’s your money (shocking!), take a flat fee for our services, and return what’s left to a cause you care about.

All this boils down to what we’re all about: we’ll pay fast (cheers for technology!), we’ll show you where your money goes (radically transparent!), and we’re driven by a community-focused and do-good culture (we ‘Giveback’ leftover money to a cause you believe in).

We’re using bots and machine learning to venture into territory no insurance company has gone before: an insurance product with conversational UI that will get you insured in no time.

Let’s talk behavioral economics

On our journey to fix this broken system and transform the business model, we learned that one factor was holding the entire industry back: fraud. Fraud is ridiculously expensive, factored into pricey premiums and creating an endless cycle of distrust.

We saw this as a rare opportunity: challenge the very ideas that the industry has sanctified with behavioral science and technology, and change insurance so that it’s not only a positive experience, but also has a greater benefit for the wider community.

Behavioral economics research is integrated into every element of the Lemonade process. We believe this will bring out the best in our users.