Lemonade Adds Auto Insurance, Boosts Cross-Selling Capabilities

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  • Lemonade is deviating from other insurtechs with auto insurance.
  • This decision will strengthen its cross-selling and customer acquisition capabilities.
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The US-based insurtech opened the waiting list for Lemonade Car ahead of its launch later this year, according to its press release.

Average lemonade premium per customer

Lemonade will add auto insurance later this year.

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Lemonade has yet to release many details on the new offering, but says it will use the technology to pay claims quickly and reward safe drivers with better prices and that the policies will be especially attractive to car drivers. electric and environmentally friendly.

The announcement continues the diversification of Lemonade’s products over the past year, with

car insurance
strengthening cross-selling and customer acquisition.

  • Lemonade earns more on each user by bundling different policies. Insurtech launched home and tenant insurance in 2016, followed by pet insurance in H2 2020 and term life insurance in February this year. Cross-selling its insurance products allowed Lemonade to increase the premium per customer (the amount each customer pays divided by the number of customers) by 20% year over year to reach $ 213 d ‘by the end of 2020, according to its annual financial results. Auto insurance is expected to further increase this premium, with Lemonade customers already spending around $ 1 billion on auto insurance each year.
  • The launch will also allow Lemonade to tap a large market and attract new customers. The U.S. auto insurance industry is worth an estimated $ 300 billion, or 70 times the size of renters and pet insurance markets combined, helping insurtech further expand its reach beyond renters : Non-tenants accounted for a third of the total premiums in effect in Q4 2020 compared to a quarter in Q4 2019, according to Lemonade’s financial results.

Despite Lemonade’s entry into the crowded automotive insurtech industry, its large offering on a single platform and its use of technology should help it stand out. American consumers have access to a wide range of technology-based auto coverages, such as IoT-based Root and Metromile or AI-based Clearcover.

In addition, electric car companies like Tesla and Rivian are launching their own insurance programs. But Lemonade can leverage its large customer base to secure sales: insurtech ended 2020 with over a million customers, according to its bottom line, and many of them will likely be wowed by the convenience of bundling. their car coverage with their other Lemonade policies.

Additionally, Lemonade, stating that it will offer premium pricing for safe drivers, suggests it could unveil telematics capabilities in addition to already handling claims with AI, creating a technology offering on par with its competitors, but with the added bonus of broader political options.

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