Lemonade, a U.S. home and renters insurance start-up, is making Europe its first global expansion target.
The New York-based firm uses artificial intelligence (AI) and chatbots to tailor insurance products for homeowners and tenants on its platform.
In an announcement Thursday, the company said the move abroad will come “soon,” but did not specify what date that would take place or which country it was stretching its reach into first.
“Nominally, the U.S. is a single country, but in terms of its regulatory structure its actually 50 different countries, every state is independent,” Daniel Schreiber, chief executive and co-founder of Lemonade, told CNBC in an interview Thursday.
“Europe doesn’t work that way. We’ll see what happens with the U.K. and Brexit, but certainly other members of the European bloc... you passport freely throughout Europe so you don’t need to set your sights on a particular country. ”
Lemonade, launched in September 2016 by entrepreneurs Schreiber and Fiverr co-founder Shai Wininger, touts its digital offering as a way of speeding up the process of applying for coverage, cutting out the paperwork and human agents often involved in the process.
Despite being a for-profit company, it takes a flat fee from insurance applicants and puts any leftover cash into charities. It charges renters a monthly subscription rate of $5 and homeowners a monthly rate of $25.
The broadening out of Lemonade’s operations to Europe would mark the financial technology firm’s first-ever expansion overseas. Schreiber said the long-term aim would be take Lemonade global “one bit at a time.”
“That’s the ambition,” he said. “We haven’t yet encountered any reasons not to.”
The firm last year raised $120 million in a funding round that was led by Japan’s SoftBank. Reports at the time placed its valuation at a figure between $500 million and $600 million. Other backers of the firm include Google, Sequoia Capital and General Catalyst.
Lemonade’s Schreiber said that insurance was a sector ripe for disruption, pointing to the “deep conflict” people feel when dealing with insurance companies.
He added that the traditional insurance model pits consumers and insurers against each other, and that they are “fundamentally fighting over the same coin” when it comes to insurance claims.
“That leads to people who are otherwise upstanding citizens suddenly feeling entitled to embellish their claim. Insurance companies now are justified in treating them with suspicion, and that spirals onwards and downwards.”