Insurance giant from New York Lemonade officially starts in the United Kingdom., the fourth market in Europe and fifth overall, with a little help from one of the UK’s oldest and largest insurance providers
Lemonade, for the uninitiated, popped up in the trillion dollar insurance world in 2015, offering a new look at how consumers should be able to buy insurance. Mobile-first and AI-powered automation for registering and filing claims was the name of the game, versus dusty old brokers and bureaucracy.
In addition, the company has always been vocal about its ethics, positioning itself as the antithesis of a traditional insurance company – the company is a certified B Corp, meaning it is independently assessed for its social and environmental performance. The business plan essentially involves charging a flat fee and then donating a portion of the insurance profits to a charity selected by each client when they sign up.
But Lemonade is still a for-profit insurance giant, having secured nearly $500 million in funding as a startup, from major lenders including SoftBank, Alphabet’s GV, Sequoia Capital and Allianz. The company hit public markets two years ago in the midst of the pandemic, and as with many digital-first cloud companies during the lockdown years, shares rose, with the company reaching a market cap of more than $10 billion at one point – more than triple early public appreciation — before falling back to Earth in a crash. The company’s valuation today is below $1.5 billion, reflecting a broader downturn in the insurtech sector that has hit many companies hard.
More recently, Lemonade closed its first acquisition when it bought auto insurance startup Metromile, before promptly laying off about 20% of its staff. A sign of the times perhaps.
Lemonade lands in the UK
And all this hullaballoo brings us to today, where Lemonade is now officially open for business in the UK, where it’s going to market with a slightly more trimmed-down offering compared to what it offers in the US. Indeed, in the domestic market, lemonade offers insurance for contents (renters), homeowners, pet, car and life, while in Germany, The Netherlandsand France, which it has expanded to in recent years, it is limited to home contents insurance.
For the UK market, Lemonade offers home contents insurance from £4 per month, with worldwide coverage for personal items up to £2,000, each with a total value of £100,000. Customers may pay additional fees for additional coverage, such as accidental damage to mobile devices.
Although Lemonade is a fully licensed insurance company in its own right, the company has formed a strategic partnership with Aviva, one of the largest general insurers in the UK. At first this may seem like an odd pairing considering they are essentially competitors, but it does make sense. Lemonade is the young, tech-driven upstart looking for help scaling into a lucrative new market, while Aviva is the $11 billion incumbent with roots stretching back more than 300 years, trying to tap into a younger audience. . And the first fruits of this collaboration will see Aviva as Lemonade’s reinsurance partner.
“We share a common vision of how digital, AI and data can transform customer experiences, and the role insurers can play in building stronger communities,” Adam Winslow, CEO of Aviva UK and Ireland general insurance, said in a statement. “In our 325-year history, we have adapted and thrived in a changing world, and our partnership with Lemonade is a sign of our intent to continue to do so.”