Why Lemonade Failed To Disrupt Insurance

[@kevinbarry71]

Dunning Krueger effect; and you know it's a stupid idea when Softbank throws money at it

[@jermunitz3020]

SoftBank, Cathie Woods, Jim Cramer

[@grahamjones5400]

"OHHH! 😮 It's new and shiny?? I'll invest $2 Billion! NOW!!" Softbank strategy

[@mauiwowie444]

I'm not gonna say their marketing wasn't tacky or disingenuous, but do you really want to see the same 3-4 corporations for the rest of your life? If you wanted to see insurance get better, you'd want 1,000 new insurance startups to pop up and to see at least 20 of them get big. People seem to hate big corporations getting away with murder, then equally hate when outsiders try to disrupt their monopoly/duopoly/oligopoly. Please pick a side instead of just hating everything. it's not productive.

[@kevinbarry71]

@@mauiwowie444 the problem is, they didn't know what they were doing. So they really didn't have any chance of disrupting anything

[@mauiwowie444]

@@kevinbarry71 Unpopular opinion: It's good when things fail. You want hundreds of insurance startups failing in unique ways, learning from each other. Then winners emerge with the strongest strategies, and you end up with a more diverse marketplace.

[@thorin01]

I laughed my head off at the claim of having a “data advantage” over insurance companies. Insurance companies live and die on the strength of their data analysis and they have spent over century building those tools. You take a population of 10,000 people and an insurance company can tell you with a ridiculous degree of accuracy how many will die each year and the causes. The odds are Lemonade’s ‘AIs’ were trained using data and models made publicly available by the insurance companies.

[@wonderfulworldofmarkets9033]

Perfect example of a "smart" sounding dumb thing to say. If you worked at any major insurance company you would realize how backward the tech culture is there. There is absolutely nothing "smart" about insurance. Companies like AIG still have 90% of their customer files as PHYSICAL DOCUMENTS that have never been scanned. It's absolutely unfathomable how incompontent these companies are and how much money they make.

[@neodym5809]

@@wonderfulworldofmarkets9033 If you make a lot of money without needing to go further into your client`s paperwork, you are working smart.

[@lightfeather9953]

​@@wonderfulworldofmarkets9033exactly. I'm familiar with the industry too and yeah there are insurance startups that have a significant tech advantage over the old insurance companies.

[@jonahfalcon1970]

Just watch the film "About Schmidt".

[@ishanharshvardhan6687]

@@wonderfulworldofmarkets9033 Dosent matter ; the fact that they have that data and insance cashflow means that they can always deploy it ; its like saying that JP Morgan Chase is not a good bank for startups but SVP is ; well we all know how that one went ; these legacy enterprise dont change cause they dont need to ; cause the industry they work in has too many variables for any tech company to come in and use one cute looking AI and change the landscape forever ; these industries take decades for any change to get absorbed ; enough time for legacy brand to simply come in and do a buyout

[@TimN-5]

As a reinsurance underwriter who has underwritten lemonade, and several other insurtechs as we call them, this summary is mostly correct. Great job

[@samsonsoturian6013]

How many of these idiot startups are there?

[@DeliciousDogMeat]

daddy…

[@KH-gp5uf]

What do you think about insure tech?

[@TimN-5]

@@KH-gp5uf we like their platforms and automated underwriting of what are pretty simple policies. You just need insurance people involved too... You're not going to be able to charge much less or have less stringent underwriting guidelines and still make money. But what you can do well is have a tech enabled insurance company - one which is easy to buy from (and easy to submit claims to) while maintaining strong insurance fundamentals. There are currently a few out there trying to take this approach which I think may be successful.

[@nizammiah6511]

​@@samsonsoturian6013 A LOT.

[@andrejmichal4676]

As someone working in the reinsurance industry, I must say you did a great job in explaining how some of the reinsurance products work, with enough detail and not too much complexity. I can also confirm that reinsurers are one of the most technologically focused companies.

[@jacrispymcrib9992]

Interviewed at Lemonade out of college. Their hiring process iirc consisted of 5 or 6 interviews and multiple take-home assignments. I found a different job after interview #2

[@GrimboBagworth]

How is this related to anything lmao that’s a normal hiring process in 2024

[@grahamjones5400]

Many companies don't want to hire regular employees, they just software and executives 😅 and hope some how everything will fix itself.

[@fartherdude5062]

New companies looking for investment often act as if their job openings are worth their weight in gold. They try to uphold an image to attract investors I always said more than 3 interviews and I’m out.

[@YeahYeahBeebisI]

That's the way these silicon valley fluff companies go. All PR, no product. They get big loans and default on them.

[@joesshows6793]

Very typical of these new companies that make no money. Not sure what they are looking for other than gaming the unemployed for free work.

[@tomlxyz]

The point with charity is bullocks. Even if they can't take additional money as profit they have an incentive to keep the money pool big so they don't run out of money on future claims. The times you pay without getting anything back are used to fund other's insurance claims. That's just how insurance works

[@jonathanj8303]

Was looking for this comment - As soon as I heard it, I thought "that makes no sense". Yet another mold-breaking business that plans to add extra overheads while charging less. Oh, and "lack of experience is an advantage". If you want to speed run bankruptcy maybe.

[@mingchi1855]

They think selfish abusers cared about charity. That‘s the best joke I've seen this week.

[@lonyo5377]

Nah, per the video they are basically just an insurance agent/broker. They give a few quid to charity and act as a glorified AI powered broker that charges you extra to pay to charity

[@kelli_1652]

I think it is insanity that people don't understand what insurance is.. it is a shared pool of money that you contribute to that relies on most contributors not requiring a payout on a regular basis meant to cover catastrophic/unexpected events. It started as naval merchants creating a pool of money to cover if a ship disappears. Basically everyone paid into it hoping their ship didn't go missing, but if it did, they'd have a way not to completely go under. Everyone who keeps saying they should get what money they paid into it back doesn't understand the basic premise.

[@tomlxyz]

@@lonyo5377 that just pushes the same problem to another party and then back to them with higher fees, once again an incentive to keep as much money in the whole system

[@pfeilspitze]

3:22 Actually, tornados have less of an effect than you might expect. They're the perfect case for insurance: they do a ton of damage, but to a small fraction of a region, and thus risk-pooling the region is incredibly effective and useful. It's a great example of where even for people for whom self-insuring damage to their car isn't worth it, for example, it's still worth getting tornado insurance. Now, houses in the regular path of hurricanes, on the other hand, insurance is silly. Because everyone gets hit by the hurricane at the same time, and averaging things out over just a few years between hurricane hits isn't nearly enough. Premiums for hurricane coverage thus have to be incredibly high.

[@samsonsoturian6013]

For that same reason, Warren Buffet reinsurance business offers insurance plans to insurance companies based on hurricane landfall

[@noleftturnunstoned]

neat

[@pfeilspitze]

@@samsonsoturian6013 yeah, to make money on hurricane insurance you need really long timelines and gigantic pockets, but that's what Berkshire can do.

[@phil1517]

Hurricane insurance is actually paid by taxpayers (FEMA) who don't live in hurricane alley.

[@honor9lite1337]

​@@pfeilspitzeare you talking about Geico? 😮

[@NorthStarBlue1]

Whenever a company claims their business model is "disruptive", what they really mean is it's unsustainable but they're hoping they can pull in money quickly enough that no one will notice.

[@downrightmike]

Just like a PSAC, there's no value to be had, unless there's inertia. And then you still have to be quick.

[@jadengrant]

Innovative, sustainable, disruptive are all words to describe a money burning pit.

[@spoddie]

I'm in IT. I went for an interview with one of the biggest insurance companies and I was very impressed with their data science.

[@Helladamnleet]

Yeah, who would have guessed insurance companies with their over 100 years of experience would know how insurance works.

[@PraveenKumar-bo7fw]

Insurance Companies are great at statistics. AI is essentially statistics with a coat of marketting BS. There was nothing these tech bros knew that the insurance sector didnt.

[@bilalbaig8586]

As a general statement, past performance is not an indicator of future returns. It is true in this case but it was not true in many other industries.

[@tomlxyz]

@@bilalbaig8586 the key here is that their experience is still valid today. It's not just being around for 100 years. While risk management gets more advanced over the time the basic principles stay the same

[@TheRubsi]

the funniest thing is that the math it is all based on is pretty simple. the insurance companies have "perfect" data on their customers and have hundreds if not thousands of high class mathematicians, real world experience, a network of auditors, etc.. There is not really a lot to even improve upon.

[@mariogilbert4260]

As the old tried and true saying goes.... "IF IT AIN'T BROKE, DON'T FIX IT" Worked for 100+ years Will work for another 100+ years

[@jazzarito]

I'm on my 2nd lemonade renters policy now and the company is great. They are an easy company to deal with. From the customer side, the experience is great. $5 a month for a policy that will cover up to $10k in losses at a whim is an easy buy for me.

[@TheVirtualObserver]

Can concur! I'm with Metromile and it's been pretty good so far. 🙂

[@Steelriter]

Agree

[@bobbym6130]

A $5 policy isn't really significant enough to draw any conclusions. Their prices for homeowners insurance were awful compared to what a traditional insurance agent was able to find on the market.

[@jazzarito]

@@bobbym6130 well their prices for renters insurance are great and that’s all I’ve commented about.

[@swaggervitamins]

@@bobbym6130i had homeowner’s insurance in Wisconsin and had never seen anything as cheap. Was even concerned it was a scam

[@jeremylawrenceamadehilledw6515]

For what it is worth, I work in insurance defense for a Tier 1 carrier in CA and we also handle cases for Lemonade. Lemonade's insureds in CA get Tier 1 litigation counsel. If you can get Tier 1 litigation counsel for less than if you bought a Tier 1 policy, that is a good reason to insure with Lemonade, regardless of the company's profitability.

[@nuradiva_ir]

Well, comparably lower insurance premium and higher payout ratio means customers are getting the best deal. Shareholders on the other hand.....

[@luxuryvagrant6496]

I am sure that your comment is informative but there's enough jargon for it to be incomprehensible.

[@grahamjones5400]

Many people dont care who the insurer is as long as they can afford the bare minimum coverage as required by landlords for tenants or state governments for car drivers.

[@samsonsoturian6013]

But that's why it's big business. They remove risks that people can't afford or are not allowed to take.

[@grahamjones5400]

​@@samsonsoturian6013 Oh okay

[@jjpaq]

Sometimes I'm jealous of low American auto insurance premiums, but then I remember the coverage is correspondingly miniscule. Here in Canada I pay about $240/mo USD equivalent, for two cars and a motorcycle, but that's up to $2 million CAD in liability coverage-none of this $20-50k limit nonsense that the States gets up to.

[@moofymoo]

now lords of land forces peasants to buy insurance for lord's property?

[@jjpaq]

@@moofymoo not really a valid point, the tenant is paying the cost regardless and the exact coverage needed is up to them-choice of deductible vs. premium, level of coverage, when to make a claim or go out of pocket, riders for specific items, etc. Better to have the tenant purchase insurance directly and provide documentation.

[@pranksterboss139]

Does softbank invest in any idea that isn't crap?

[@ShidaiTaino]

Yes but rarely but that tracks for most businesses and investments

[@jpanda79]

Softbank just lucked out on a couple

[@samsonsoturian6013]

T-mobile, nvidia, arm, uber (good investments but not at the price purchased at)

[@GnoixGenp]

When you have as much money as they do, you literally just need 1 winner and it's worth all the losers

[@katewolf00]

Alibaba

[@asdfsadf67]

another instance of tech bros trying to rediscover the wheel

[@worldstar907]

its literally forbidden to collect unnecessary information, like you can't even charge a higher premium if your genders insured risk is higher. so I don't see how this industry can be disrupted. think of all the regulations too, respectable enough that they even got a licence.

[@vanessapigwin]

I have a friend who is an actuary. One day I asked him why not just make an ML model that makes sure they don't lose too much based on parameters they get from the customer. He said that is not possible because there is a potential for a blackbox AI or ML model to introduce biases without the actuaries knowing. In the event someone feels they are denied insurance because of discrimination, the insurance company should be able to justify, according to insurance standards, that their pricing is correct. That's why "traditional" insurance companies don't buy the AI hype. If they do have it, it's all marketing for the investors while they do it the old way under the hood

[@RAS_Squints]

Almost can say Lemonade turned out to be a lemon

[@caracallaavg]

A lemon party, even

[@duran9664]

You still can make a great lemonade from a lemon 😒

[@althunder4269]

They took a lemon and made lemonade.... oh, wait.

[@joesshows6793]

Hey o!

[@joesshows6793]

@@caracallaavgoh dear 😳🤢

[@Carteruss]

Attempted to cancel my renter’s insurance, lemonade proceeded to cancel all of my policies (personal items, auto, etc). A human would’ve been greatly appreciated

[@Samuel-er5bf]

you can ask for an agent and they’ll get you one. i don’t remember if it was on the chat or follow up email

[@Carteruss]

@@Samuel-er5bf I was able to get in touch with an agent, however they were in a completely different office, location, and department from the policy controllers. Best they could do was shoot them an email and wait. They recognized themselves the inefficiency of that system, but were powerless to help.

[@hblee88]

Wouldn't have made a difference whether human or AI voice "You've been cancelled" is the same.

[@duancoviero9759]

the players in the insurance game are completely entrenched in the game, very difficult to disrupt anything in that industry.

[@BigRedNutcase911]

You can say that about the huge companies in any industry. Disruption can only happen when someone truly discovers something the entrenched companies overlooked. It has to fundamentally shift how business is done in the industry. Lemonade tried to beat the insurance companies at the same game thinking they could do the math better. Surprise, the companies who've refined their models over a hundred years know the math better.

[@spezial-m9146]

Why Lemonade Failed To Disrupt Insurance? Because it's a beverage. Next question, please.

[@remipoujoulat7759]

Lol 😂

[@ashleyshim2078]

😂😂😂😂

[@inr63]

lolololololol

[@GizelleQuant]

😂

[@LamLawIndy]

I do think that the insurance industry may be ripe for disruption in some respects, but relying on policyholders to refrain from "embellishing" claims b/c of the "charity donation" isn't a good strategy.

[@frevazz3364]

It’s mostly a marketing tactic

[@gbfraser921]

What a fabulous introduction to Lemonade and the possible over-selling of AI capabilities by techies trying to get higher valuation for not so special companies! Great job! I would love to see a similar deep-dive on some of the leading SAAS companies.

[@OnChainGaming]

This video is the perfect sign it's time to invest. Mark my words.

[@ahmedhasan7351]

I Agree

[@joebuslife9275]

Up 120% in the last 20 days! Peak FUD is when you know they are getting desperate to make sure their short position works out for them (LMND is in top 5 most shorted stocks)

[@ssz974]

Insurance is not an easy-to-disrupt industry. Lemonade’s efforts are commendable. However, what such organizations get wrong is that they try to oversimplify a complex topic and don’t give enough time to observe the risk patterns and then struggle with the pricing issues eventually. There is a delicate balance between pricing and customer value that is achieved over time. A typical insurer takes more than 7 years to breakeven so one needs to have a long term strategy. Technology can solve many things but not everything.

[@Jeez001]

Let’s not forget they bought Metromile which was SPAC snake oil chamath pumped.

[@TheVirtualObserver]

Just gonna say Metromile's been pretty good as an end-user. Although its premiums have risen recently. Still, I've done comparisons and I'm paying less than if I switched to a different brand, at least for now.

[@CemEke_CIO]

wow thank you for the amazing research. it must take a long time to understand these operational details for many different companies. my takeaway is: lemonade has been killing their own profit margins for no reason.

[@benoitkinziki3916]

Quota-share reinsurance does not work the way you described it. (You basically described excess of loss reinsurance twice but with different levels of retention) The way quota-share works is you cede x% of your premiums and losses (so if you have a 1$ loss you cede x$ and if you have a 1,000,000$ loss you cede x * 1,000,000$) and then reinsurance company will send you back a portion of your ceded premium as commission for underwriting the policies. It's basically insuring a risk with a partner.

[@uselessDM]

Having AI determine whether a claim is fraudulent sounds like a sure fire way to get sued into oblivion. Especially since it's not even really possible to begin with.

[@frevazz3364]

They don’t really have AI, it’s just marketing gimmick to get investor money and customers.

[@Nohandleentered]

Maybe the legacy insurance companies knew what they were doing 🤷🏼‍♀️. You can’t make a more efficient paperclip.

[@Saliferous]

Some of these things DON"T NEED DISRUPTION. I LIKE having humans review important records. I can argue with a human. I can't argue with an ai. Not like, they're even cheaper. They're often MORE EXPENSIVE than the old school ones.

[@AndiswaMbatha701]

Similar insurance was launched in South Africa called Naked Insurance. Not a lot of financial information is available but the company is doing very well in the country.

[@Mathguy363]

FYI the reason why older homes, or home with older roofs/heaters/ect… isn’t maintenance, which is never covered, it’s because it’s more likely to be damaged (ex: strong winds rip the shingles out and damages something)

[@bokesnmokes]

No, an older home is more solidly built and more likely to survive storms, and has already survived many. The reason they’re more expensive to insure is that they are built with very high quality materials and with labor intensive construction techniques. I had a house that was built in 1915 and all the floors were oak, and all the walls were plaster. That made it ungodly expensive to insure.

[@jaydubya9265]

I made a good profit on Lemonade. Glad I got out when I did.

[@timmychau]

If Lemonade is in phase 3 segmentation, couldn’t that be a potential reason for their loss ratio being higher? Ie their algorithms more accurately price premiums to reflect payouts and instead of charging higher (closer to average market rates) and pocketing the rest, giving the surplus back to customers in the form of lower premiums?

[@Tie509]

Going from essentially an insurance broker pretending to be an insurance company to a traditional insurance company. "Disrupter." 🙄

[@onlythebest3311]

I was a lemonade customer on a condo insurance to satisfy the HOA, picked lemonade due to their easy policy signup via the app. The problem is year over year when they renew my policy they increased my policy cost by $100 (30% !) each year with some bs add on coverage I don’t need without even getting my permission on auto renew, I had filed no claims at all also in those years, finally got so fed up with this shady practice I cancelled with them. If they just remained honest like the ads said and kept my policy price the same with minor increases I would stayed with them forever, their loss not mine.

[@thisisnightshop2037]

The only disruption lemonade created was an ad disruption on KZbin

[@DJDeezNutz]

I got their ad right after the video lol

[@crimiss1]

At 10:38 you said that the reinsurance company pays 100% of the corresponding claims. This is not the case as that is not how quota share reinsurance works. The snippet you are reading from provided by lemonade appears to be intentionally ambiguous. Just thought I’d clarify that the same proportion that is ceded is the proportion in which the claim is paid.

[@damascusraven]

Can confirm. I worked for a company that partnered with Lemonade for a short time, then almost immediately cut that partnership due to how bad they are. It was also almost impossible to reach someone there, even as a partner company.

[@quairan2099]

This video actually makes me want to buy more Lemonade stock.

[@jpanda79]

State farm being one of the largest insurers and being one of the pioneers of auto insurance rating vs flat rates i would almost garuntee has more customer data than lemonade

[@justyouraveragelurker]

At this point people should just assume that if softbank is investing on a startup it will most likely fail.

[@couponuser]

Lemonade has reason to be concerned. At least six Florida insurance companies have shut down, all operating similarly: acting as middlemen, they purchased re-insurance to handle claims. However, they struggled to secure affordable re-insurance to cover claims adequately. The issues mentioned by the owner in the interview, such as stolen cell phones and identity theft, are typically considered "upsell" items. These are offered at low rates by insurance companies because they anticipate minimal usage. Yet, if claims for such items persist, insurance companies stand to lose money. This explains why insurance companies often drop customers who file such claims. Insurance policies are primarily intended to cover catastrophic losses.

[@-Meadowglen]

No - they need to refund the policy holders if there are excess funds left over. If I pay you 3600 a year and when its all over with there's 300 surplus refund to me and let me decide what to do with it. Mutual insurance companies do that. Great post and I priced Lemonade and they were sky high and I have no claims no drama nothing bad and they were one of the highest quotes.

[@tomlxyz]

How do they fund years with higher claim rates if they get rid of the excess each year?

[@ckennylin717]

They rely on the laziness of "digital natives" to do their insurance shopping online and overpay premiums rather than finding a broker or calling multiple companies for competitive premiums. I get overpriced quotes from them just for fun.

[@chiefdan07]

Charity is just a term companies use as Tax Write-offs

[@ProfessionalBirdWatcher]

I remember when they first hit the scene. They had a golden opportunity and squandered it. Big insurance is still bloated AF

[@samsonsoturian6013]

Bloated? How?

[@lv7603]

It’s a brutal business nobody sane takes on that.

[@KH-gp5uf]

Curious as to why Amazon and Google dropped out of disrupting the industry? Insurance is hard, the fine line between gambling and predicting the future, with progress and deterioration rapidly increasing volatility… but hey techies think they know everything.

[@gabrielmartinez461]

Lemonade worked for me:they quickly paid out my claim when my clothes were stolen from the apartment washer. I liked it, too bad they are gone.

[@maxa5987]

In my mind their high net loss ratio is due to their low premiums, not due to a fault in underwriting causing higher claims. They are the newcomer, they need to attract customers with lower prices.

[@doomtomb3]

As a 5-year customer and investor, I think they do a fine job on ease of signing up and their claims process worked as expected. I had two claims, one of which was covered and the other was not covered in my policy. Don't have anything bad to say about them, but I realize the disruption advantage to the industry may not be as significant as once thought.

[@iterativegrowth]

man, I had such high hopes for Lemonade, but they’ve failed to expand to even cover most of the US :/

[@mariogilbert4260]

Basically the way you describe the relationship between an insurer and reinsurer is pretty much the same concept as in the music industry Artist signs with a small label, Has a distributor deal with bigger record company... Artist gets the short end of the stick

[@SnowmanTF2]

Feels like a classic with Softbank involved, too band Credit Suisse did not, as the window for their shenanigans to have added to a companies backstory story is closing.

[@tomlxyz]

Credit Suisse seemed more about getting involved in frauds that still don't make money in the end

[@victoryuan2319]

​@@tomlxyz Unfortunately, Credit Suisse doesn't exist anymore

[@psjasker]

USAA offers direct coverage - no agent. A fantastic company

[@monkeysezbegood]

Very early days for Lemonade. I am not going to write them off just yet. Next few years will tell us a lot.

[@Skaahn]

I think this can also be said about Uber (Taxis are still running) and Airbnb (hotels still in business)

[@joeschmoe6908]

Taxis have taken a huge hit since the introduction of Uber. I'm an Uber driver myself and have spoken to multiple taxi drivers about it. Outside of large cities taxis are basically dead.

[@Dragon-Believer]

Uber only got market share because they were burning money. Their business model makes no sense.

[@RBzee112]

Taxi drivers used to make enough to put their kids through college before Uber. Not anymore.

[@samsonsoturian6013]

Correction: Most older taxi services are now on Uber, squeezing out the amatuers. AirBNB likewise absorbed most timeshare companies

[@jermunitz3020]

I see a WSM video I click instantly. Thanks for not advertising a gambling platform this time.

[@danielcrotty8697]

I’ve been using Lemonade for renters insurance and it’s been great. They had a good price and the best coverage, on top of the best user experience. I got a quote for their car insurance and the price was ok. But I just decided to stay with Progressive.

[@phil1517]

And how exactly do you know they're "great" unless you made a big claim and they paid it?

[@petergerdes1094]

Right but there is potentially some money to be made by cutting out the insurance agents. Fuck, I use lemonade simply because I'd happily pay a premium not to deal with an insurance agent. Whether or not Lemonade is a good play there is 100% a valuable market that removes the local agents.

[@Bewilderebeest]

It seems like these outsider “disrupters” only see opportunity because they don’t know enough about the industry. And if SoftBank likes the cut of your jib … that doesn’t bode well.

[@AverageAngel]

looks like Berkshire is right, insurance is complicated

[@lilliandun4490]

Got an ad for lemonade during this

[@MasterYoshidino]

I like lemonade. Decent tasting drink.

[@Xorgye]

I have worked on the internal algorithms of financial product offerings. AI is a buzzword: there have always been complex models that are depended on a large amount of variables. There is just no 'leap' innovation that AI provides here. What you can innovate with is on the maintenance of those complex systems. And they do this already, a lot of brands share the same software technologies but tuned a bit different to their own likings to save money. Maybe AI can help in keeping these complex systems in check and keeping them maintainable and cheap(er).

[@billdavenport8228]

The only way to disrupt a thoroughly regulated industry like insurance is with an army of lawyers and state politicians to change laws. Even the insurance brokers are regulated at every part if the sales process

[@AnberThe]

well, it's at most it's really changing somethings, at the least tho, it's a regular insurance company. SO it is incrementally better in the way it processes claims. So it's worth allocating a small amount as I have.

[@detorreonpla3424]

Their story isn't over yet!

[@PaperBagInvest]

Videos like this make me more bullish on LMND. Good overview, but it’s analysis that’s wide and about 2” deep. I continue to add to my position and see them scaling to profitability in 2026, as they have guided for.

[@ahmedhasan7351]

I was going to mention you, then I found your comment

[@blooming_saffron]

As an investor myself, I actually don’t mind if they become more like a “traditional” insurance company. I think the customer friendly way of getting an insurance is great. Currently, I feel like getting insurance is a hastle, if I check on the internet, I actually don’t really know what I can get insurance for exactly. If I want something, I have to talk to an agent. Having this on an app with a chatbot helping you out sounds like a great idea to me. Maybe I’m wrong, but why not give it a shot.

[@jacobsayre5723]

As an insurance professional… interesting video. Lemonade would have had a better shot at being a direct to consumer independent broker/agent with their AI. I work in a larger payout field so to see profit margins on a minuscule $5k claim made me chuckle. Numbers are slightly skewed as well as there’s no reference on deductibles with respect to the claim. Besides renter’s policies the minimum claim amount is drastically going up as parts and labor has only gone up.

[@Samuel-er5bf]

Their renters insurance is great. First apartment was monthly low payments, second apartment was a full year balance up front which was still affordable. Ai helped a lot and when it couldn’t a human answered all my questions.

[@BigGuy10Points]

So Lemonade is acting as the equivalent of an MVNO does to phone carriers. For example Mint doesn’t own a single cell tower. They lease bandwidth from TMobile. MVNO - mobile virtual network operator

[@joebuslife9275]

They are one of the only insuretechs that has the full stack. They can and do underwrite their own policies. They are just doing a portion under reinsurance to allow for greater growth in the beginning. They are nothing like Mint really

[@indianavice7075]

Some businesses just work. Insurance works the way it is. I will say as an agent that it needs some upgrading but over all there is a reason that insurance is profitable, and why the same companies have been around for a long time.

[@Chareddragon]

Honestly the best way to make insurance better is to put some of that money in stocks as an insurance fund. Creating a pool from which money can be pulled to pay for claims

[@samsonsoturian6013]

That's how it works. Insurance company stores money in liquid investments and offers insurance to anyone who asks because they are always overcollateralized. Berkshire is a reinsurance company which is why buffet manages big investment funds

[@jboomhauer]

Damn, I actually want them to succeed now.

[@bunberrier]

When I heard App, AI, and charity I already knew enough. Pretentious manbuns who think they know better, then Larp at it until the money given them runs out

[@bobbym6130]

The charity thing is absurd, like FTX and the altruism BS. They could just refund the money to the customer if it was legit

[@grantguy8933]

Get a quote from and compare the service and cost.

[@99HockeyDad99]

These videos are really well done !

[@EcomCarl]

It's commendable how Lemonade aimed to revolutionize the insurance industry with AI and a digital-first approach, highlighting the need for innovation in an age-old sector. However, their struggle to turn a profit underscores the complexities of disrupting such a vast and entrenched market. 💡

[@cooldude5058]

Lemonade will disrupt the insurance industry. Economies of scale matter a lot in the insurance industry. You can hire the best data scientists, but if the culture of a company is not innovative, it won't be as effective. Sometimes, disruption takes some time.

[@williamcallahan600]

Really great video with a strong understanding of the insurance industry.

[@timg9019]

All pessimistic, interesting but this business still has a lot of potential. Trends on opex and headcount as revenue still grows have been very positive. Steady rather than spectacular granted but have quite a lot of confidence in the leadership from what i see and hear

[@joebuslife9275]

This is one of the most shorted stocks on the market. The are a lot of vested interests & forces trying to paint the company as a failure. As a long time Tesla investor I've seen the same tactics used over and over again against them. The fact is that LMND is cash flow positive already and has no need to raise more capital and will be net profitable by 2026, but you'll never hear any of that from wall street or these analyst pieces.

[@ContactFlying]

TBH the AI facial technology announcement was what actually caused me to leave Lemonade permanently and switch to another insurance carrier. Just one of the things I am personally super uncomfortable with when I am in a situation of crisis. I used them for nearly 18 months up until that point. A shame, really.

[@DavidAllanCoderre]

The data comes from the app you have to install on your phone. Not the questions being asked. 16:32

[@bobbym6130]

I tried it after buying my home. The prices they offered were awful, much much higher than going through an old school insurance agent recommended by phone by an old school real estate agent.

[@raymondcaylor6292]

Agreed. Shopped Homeowners last October. Almost exactly double of my Allstate renewal amount. Double.

[@carossetti]

Great insights. I sat out on this one.

[@will2003michael2003]

These guys seem great, the problem is they’re not available in my state. Bummer.

[@CarlosHankron]

A lot needs to be disclosed to the public about this company how they get a data and it's going to take somewhere to get it right but I think it will pay out this business model in the future

[@aprilmeowmeow]

i have pet and life insurance through lemonade. The terms of my plans are actually very understandable and clear. There isnt like, 16 pages of legal jargon at the bottom. Idk, ive never had any issues with the company. My claims (5 in the past 2 years) have all been approved immediately, save for one (which had a confusing vet bill). You can indeed get ahold of a human if you need to, also. A human approved the one claim that didnt auto approve.

[@markclark4401]

Hmm. I felt in this video things were said about AI and some other things that indicate the person is not fully aware of AI and what it actually does behind the scenes. Also, the fact that the AI is approving more claims than people, REVEALS the answer. Modern insurance companies fail to approve claims they should be approving.

[@amflyer484]

You left out one of the very important aspects of the insurance business, underwriting investment profits. You take the premium dollars and invest them, if you do well in the market, this mitigates losses on th underwriting side. So essentially insurance profit and losses are premiums - claims plus investment offset by reinsurance premiums and payouts. Often the premium investment profits can make the difference between a profitable line and a loss.

[@mathewleuret7881]

Im not joking this KZbin channel is top 5. Your videos are amazing bro

[@BigGuy10Points]

If you buy a house with a mortgage regardless of the product your required to keep an active policy

[@BillyLapTop]

Would be interested in how State regulators viewed Lemonade.

[@jaywu2856]

High Risk customers pay too little and low risk customers pay too much??? The whole idea of "Insurance" versus "gambling" is not to assign EXACT probablities to each individual customer (Gambling), but to have a large enough insured group of people so that you can reliably predict how many claims at what cost and base your average rates to those people in that same group. Essentially, insurance is spreading the risk evenly to everyone in that group b/c probability is not predictable in small sample sizes and you don't know who will get sick/accident and who won't. The insurance company gets the premiums ahead of time and supposedly makes money by investing the unused premiums until they need to be paid out. Don't believe me? Go ask Warren Buffet who owns GEICO and you state insurance commissioner.

[@jeff-hh9mc]

Something that I didn’t hear covered was / is how a lot of insurance companies will operate at a loss in order to get your money in order to invest it with the goal of increasing in value MORE than they have to pay out in claims.

[@AgentNolies]

I use them for my homeowners insurance

[@scottmolnar4132]

I would not

[@AgentNolies]

@@scottmolnar4132 cool, pay more.

[@edbardoe2195]

Insurance usually doesn’t cover maintenance, that a home warranty.

[@skillswiper]

I do have one question: Are their rates substantially lower than competitors? And if so, you would expect to see a high loss ratio as they opt to take a lower margin at scale?

[@dj0ai]

Well... It will be interesting to see if they failed as much as you think. Things takes time. We'll know for sure in 5 years.

[@joebuslife9275]

Market is already waking up. Stock up 120% in 20 days. Cash flow positive this Q3 and from here onward. Net profitable by 2026

[@wokethelast8498]

Wow we really went through an era where tech went into industry’s failed to revolutionize anything(Uber,door dash, insurance) and back to square one except everything was much cheaper when the tech bros didn’t charge insane fees in that specific industry.

[@SKF358]

I use Lemonade Insurance, and I like it.