Lemonade Insurance to Enter Car Insurance Market

Lemonade, a behavioral economics-based insurance provider, aims to add auto insurance to its existing renters, homeowners, pet, and life insurance services in the United States.

The insurance company revealed that it is preparing to launch a vehicle called Lemonade Car later this year. Customers are encouraged to register as soon as possible.

In less than a year, the business has expanded into three big new insurance categories. The company began with home insurance, then expanded to include pet insurance in the second half of 2020 and term life insurance in the first half of 2021.

Lemonade, the first global insurance IPO, raised more than $300 million in July.

It was planned that the company would branch out into auto insurance. Last fall, when the company announced its life insurance agency, Chief Executive Officer Daniel Schreiber noted that investors often question when it would sell automobiles and hinted that it would be soon.

According to the company, customers will be able to bundle their home, pet, and life insurance policies with their car insurance.

The auto insurance industry in the United States is estimated to be worth $300 billion, which is 70 times the size of the homeowners and pet insurance industries. Lemonade claims that a "huge number" of its current customers are vehicle owners who already spend $1 billion a year on car insurance.

Lemonade Car will "use technology to manage emergencies and pay claims quickly, will give great prices to safe drivers, and will be particularly appealing to drivers" of electric cars, according to Shai Wininger, chief operating officer and co-founder of Lemonade.

Lemonade has defended the use of artificial intelligence in insurance against charges that it is biassed against women, minorities, and people of color. Last year, Schreiber claimed in a blog post titled "AI Can Vanquish Bias" that "algorithms we don't understand can make insurance fairer" and built on his views in commentary republished by Carrier Management.

According to Schreiber, everyone needs to be judged on their own merits, not based on ethnic, gender, or religious characteristics. "If the AI treats us all as humans in this manner, then it is rational. If I have to pay more for my candle-lighting habit, so be it....," he wrote.

Lemonade is a carrier in the United States, Germany, the Netherlands, and France.