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New arrival Lemonade: making insurance easy, transparent and paper-free


A bubbly new personality might not be what you expect in the insurance world – but the data-driven company Lemonade likes to look for the upside.

Lemonade, an American company with EU headquarters in the Netherlands, has just launched its contents and liability insurance on the Dutch market.

Its tagline is that it’s built ‘for the 21st century’. Instead of dealing with brokers, and lots of ‘hold the line’ moments, it aims for instant everything and zero paperwork, offering a transparent insurance policy via its website and app.

While surveys from the DNB banking authority show that trust in insurers in general has declined over recent years in the Netherlands, Lemonade says it works on a different model: it takes a fixed fee, a proportion of the premium goes towards reinsurance, the rest pays for claims…and if there is any leftover, it goes to charities chosen by its clients.

‘As a data-driven organization built on transparency, we want consumers to understand what they are buying,’ says Ori Hanani, VP European Operations at Lemonade. ‘Insurance should be accessible to everyone, and moreover, easy to read and understand – not only for lawyers, but for ordinary people,’

Simple language

An example is its so called Policy 2.0, which Lemonade claims is the ‘shortest, simplest insurance policy written for the 21st century’, so that you know from the start that hailstones are covered but floods are not, or that if burglars steal your camera, you’ll get the replacement cost back.

Actually, if you don’t think the wording is easy to understand, you can even try to change it. ‘It was designed by our team but is also open source and crowdsourced: anyone can make suggestions to make it even more clear and transparent via GitHub,’ Hanani adds.

‘Insurance brands are some of the least loved and least trusted, and we came to understand that the cause is structural: every dollar paid out in a claim is a dollar less to the insurance company’s bottom line,’ says Hanani.

‘Their interests, in other words, are profoundly conflicted with yours. We designed a business model that minimises the conflict of interest between the insurance company and policyholders. Lemonade takes a flat fee regardless of how many claims are made and gives back unused money to charities our policyholders choose.’

Organise your insurance by app. Photo: Lemonade

The company says the maths add up because AI displaces brokers and paperwork, reducing time, hassle and costs, meanwhile it uses ‘behavioural economics’ to minimise fraud and conflict. If you report a claim, for instance, be prepared to make a video of yourself explaining it.

Speed is another plus: typically it takes a few seconds to ‘chat’ with AI Maya to set up insurance, while if your bike is stolen, AI Jim deals with your claim, runs anti-fraud algorithms and can approve your claim ‘in seconds’.

This bot handles about a third of all claims, and is the first contact in 97% of cases – although emergencies or ongoing claims can go through to a human on the Claims Experience team, who is tasked with the Lemonade mission ‘to delight policyholders and give them an unforgettable experience’

Good causes

The company has been accredited as a B-Corp for its charitable work, and its ‘Giveback’ means that in a typical year up to 40% of premiums will be available to be given to good causes, its data scientists estimate.

This year, it has donated $1,128,110 to 34 non-profit organisations globally chosen by customers. Meanwhile, despite the impact of the coronavirus, with the Netherlands it has launched its second country in Europe, gone public, added pet insurance to its American offering and just announced that France will be next.

Actually, an unforeseen but very possible event like a global pandemic, is an ideal lesson when you are thinking of insurance. ‘It’s a common phenomenon to postpone taking out insurance until you know you need it,’ says Hanani. ‘People think, “Why invest in something now for a risk that may never happen in the future?” But this mindset changes when an event with low probability happens to ourselves or to someone we know.’

‘Suddenly, insurance payments are now seen as a gain in the face of a huge loss. So when you consider buying insurance, or wonder if it’s a good investment – just know, there’s no time like the present.’

To find out more about Lemonade, visit

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