Lemonade, a peer-to-peer insurance company, has launched in New York state, where it hopes to take on traditional players through a mix of clever technology and a charitable component.
Lemonade raised $13 million in the biggest seed round of 2015 and, having secured a license as a full-stack insurance carrier by New York State, the firm is now inviting homeowners and renters to sign up online and through its app. Under the peer-to-peer model, Lemonade will ask customers to nominate a charity when they buy a policy. Then, the premiums of people who choose the same charity are pooled. Claims are paid out of these pools and any funds that are left at the end of the year go to the chosen charity. Policies start at $35 a month for homeowners and $5 for renters, with the entire process digitised, "replacing brokers and bureaucracy with bots and machine learning".